Spectrum Brands Holdings, Inc. (NYSE: SPB; “Spectrum Brands” or
the “Company”), a leading global branded consumer products and home
essentials company focused on driving innovation and providing
exceptional customer service, today announced the closing of the
previously announced sale of the Company’s Hardware and Home
Improvement business (“HHI”) to ASSA ABLOY for $4.3 billion in
cash, prior to customary purchase price adjustments.
David Maura, Spectrum Brands’ Chief Executive Officer, said, “We
are very pleased to complete this transaction, which is the
culmination of a tremendous amount of hard work. I am thankful for
our management team’s efforts and the steadfast support and
encouragement of our Board of Directors and stockholders. We could
not have asked for a better partner in ASSA ABLOY and could not be
happier to have them as the new stewards of our business and
employer of our former colleagues.
“Today’s closing delivers significant liquidity and strength to
our balance sheet providing us with solid financial footing to
execute on our objectives both strategically and operationally in
this increasingly uncertain and challenging economic environment.
After taxes, fees, and customary price adjustments, we expect to
receive approximately $3.6 billion of net proceeds from this
sale.
“We intend to use the proceeds from the sale to materially
reduce our indebtedness, strengthen our operating performance and
fund opportunistic M&A activities. We will also be in a
position to return a substantial amount of capital to our
stockholders.
“We remain committed to our strategic goal of becoming a faster
growing, higher margin, pure play Global Pet Care and Home &
Garden company by ultimately separating our Home & Personal
Care business from our remaining businesses in the medium term.
These initiatives are a testament to our commitment to delivering
value to our stockholders and underscores our view that our Company
has significant upside potential.”
The Company intends to reduce its indebtedness by approximately
$1.6 billion by repaying in full the outstanding loans under its
term loan facility and revolving credit facility, which had
outstanding loans in a principal amount of $392 million and $715
million, respectively, as of the time of close, and by redeeming in
full our 5.75% Notes due July 15, 2025, of which approximately $450
million in aggregate principal amount is outstanding. Following
these repayments, the Company intends to permanently terminate the
$500 million of revolving loan commitments under its $1.1 billion
revolving credit facility, with the remaining $600 million of
revolving loan commitments being available under its credit
agreement for subsequent borrowings.
The Company’s Board of Directors has approved a new stock
repurchase program authorizing the purchase of up to $1 billion of
common stock, replacing the prior stock repurchase program.
Pursuant to this program, the Company intends to enter into an
accelerated share repurchase agreement to purchase an aggregate of
$500 million of the Company’s common stock. After paying down debt
and funding this ASR, the Company expects to be at a net cash
position at the end of fiscal 23.
Finally, the Company also intends to use a portion of the
transaction proceeds to invest in its long-term operating
performance and free cash flow generating capacity. The Company
will continue to seek opportunities to invest in its employees and
talent base, marketing, advertising and innovation of new products
and IT infrastructure. Additionally, the Company will continue to
monitor the market for opportunistic, attractive and synergistic
M&A opportunities particularly within its Global Pet Care
business. Until deployed, the Company will invest the remaining
proceeds in highly rated, liquid depository accounts, time
deposits, and money market funds, taking advantage of the
investment returns available from the attractive current market
rates.
As previously announced, on September 8, 2021, Spectrum Brands
announced an agreement to sell HHI to ASSA ABLOY, subject to
receipt of regulatory approvals and satisfaction of customary
closing conditions. On September 15, 2022, the U.S. Department of
Justice (the “DOJ”) filed a lawsuit to block the closing of the
sale and on December 2, 2022, in order to address the DOJ’s
concerns, ASSA ABLOY entered into an agreement to sell its Emtek
and the Smart Residential Business in the U.S. and Canada to
Fortune Brands. Thereafter, on May 5, 2023, the parties entered
into a stipulation with the DOJ to settle the lawsuit and receive
the DOJ’s approval for the completion of the sale. Finally, on June
5, 2023, the parties received the final remaining regulatory
approval from the Mexican competition authority to complete the
transaction.
About Spectrum Brands
Spectrum Brands Holdings is a home-essentials company with a
mission to make living better at home. We focus on delivering
innovative products and solutions to consumers for use in and
around the home through our trusted brands. We are a leading
supplier of specialty pet supplies, lawn and garden and home pest
control products, personal insect repellents, shaving and grooming
products, personal care products, and small household appliances.
Helping to meet the needs of consumers worldwide, Spectrum Brands
offers a broad portfolio of market-leading, well-known and widely
trusted brands including Tetra®, DreamBone®, SmartBones®, Nature’s
Miracle®, 8-in-1®, FURminator®, Healthy-Hide®, Good Boy®, Meowee!®,
OmegaOne®, Spectracide®, Cutter®, Repel®, Hot Shot®, Rejuvenate®,
Black Flag®, Liquid Fence®, Remington®, George Foreman®, Russell
Hobbs®, BLACK + DECKER®, PowerXL®, Emeril Lagasse®, and Copper
Chef®. For more information, please visit www.spectrumbrands.com.
Spectrum Brands – A Home Essentials Company™.
Cautionary & Forward-looking Statements
Repurchases of the Company's common stock may be made in the
open market or through privately negotiated transactions (including
under the ASR agreement), or by other means, including through the
use of trading plans intended to qualify under Rule 10b5-1 under
the Securities Exchange Act of 1934, subject to market and business
conditions, legal requirements, and other factors. This share
repurchase authorization does not obligate the Company to acquire
any particular amount of common stock, and share repurchases may be
commenced or suspended at any time at the Company's discretion.
This press release does not constitute a notice of redemption
for the 5.75% Notes due July 15, 2025.
Certain matters discussed in this press release may be
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. We have tried, whenever
possible, to identify these statements by using words like
“future,” “anticipate”, “intend,” “plan,” “estimate,” “believe,”
“expect,” “project,” “forecast,” “could,” “would,” “should,”
“will,” “may,” and similar expressions of future intent or the
negative of such terms. These statements are based upon our current
expectations of future events and projections and are subject to a
number of risks and uncertainties, many of which are beyond our
control and some of which may change rapidly, actual results or
outcomes may differ materially from those expressed or implied
herein, and you should not place undue reliance on these
statements. Important factors and uncertainties that could cause
our actual results to differ materially from those expressed or
implied herein include, without limitation: (1) our ability to
successfully deploy the proceeds of the HHI sale as planned or at
all, including our ability to pay down the indebtedness, to
repurchase our shares pursuant to our stock repurchase program,
and/or enter into the ASR; (2) our ability to separate the HPC
business and transform the Company to a pure play Global Pet Care
and Home & Garden company on the timeline indicated or at all;
(3) our ability to invest and receive the benefits from the
investment in the operations of the Company; and (4) the other risk
factors set forth in the securities filings of Spectrum Brands
Holdings, Inc. and SB/RH Holdings, LLC, including our fiscal 2022
Annual Report and subsequent Quarterly Reports on Form 10-Q.
Some of the above-mentioned factors are described in further
detail in the sections entitled “Risk Factors” in our annual and
quarterly reports, as applicable. You should assume the information
appearing in this press release is accurate only as of the date
hereof, or as otherwise specified, as our business, financial
condition, results of operations and prospects may have changed
since such date. Except as required by applicable law, including
the securities laws of the United States and the rules and
regulations of the United States Securities and Exchange
Commission, we undertake no obligation to publicly update or revise
any forward-looking statement, whether as a result of new
information, future events or otherwise, to reflect actual results
or changes in factors or assumptions affecting such forward-looking
statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20230619209742/en/
Investor/Media Contact: Faisal Qadir 608-278-6207
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