Acquisition
April 05 2002 - 10:20AM
UK Regulatory
RNS Number:1181U
Fortune Brands Inc
5 April 2002
(BW)(IL-FORTUNE-BRANDS)(FO) Fortune Brands Announces Kitchen & Bath
Cabinets Acquisition
Business Editors
LINCOLNSHIRE, Ill.--(BUSINESS WIRE)--April 5, 2002--
Purchase of The Omega Group Enhances Competitive Position, Increases
Company's Annualized Cabinet Sales 40% to More Than $1.1 Billion
Fortune Brands, Inc. (NYSE: FO), the consumer products company,
today announced that its home products business has signed a
definitive agreement to purchase The Omega Group, a growing,
privately-held manufacturer of high-quality kitchen and bath
cabinetry.
Fortune Brands' kitchen and bath cabinet business, MasterBrand
Cabinets, Inc. (MBCI), is the second largest North American cabinet
manufacturer and generated approximately $810 million in year 2001
sales through all major distribution channels, including home centers,
kitchen and bath dealers, wholesalers and major builders. The Omega
Group's net sales reached $325 million in 2001 through the Omega,
Kitchen Craft and Home Crest brands. Primarily a supplier of custom,
semi-custom and frameless semi-custom cabinetry to kitchen and bath
dealers, The Omega Group will enhance MBCI's ability to compete in the
highly fragmented dealer channel, the industry's largest channel of
distribution.
"At Fortune Brands, we're committed to positioning our businesses
for stronger growth and higher returns, and this is another important
step forward that builds on the major strategic progress we've made in
our two most profitable businesses: Home & Hardware and Spirits &
Wine," said Fortune Brands Chairman & Chief Executive Officer Norm
Wesley. "We like the demographics and growth opportunities in the
kitchen and bath industry, where we've more than tripled our cabinet
sales since 1997 with very successful acquisitions - Schrock and NHB -
as well as solid internal sales growth. This is another high-return
acquisition that will accelerate our development in one of our most
successful and attractive growth markets." With the acquisition, the
company's annualized cabinet sales will increase 40% to more than $1.1
billion.
Expanding Product Line with Custom and Frameless Cabinetry
"The addition of The Omega Group will enhance our current cabinet
business in three important ways," added Rich Forbes, President of
MasterBrand Cabinets. "First, we'll enhance our position across key
channels of distribution. We've made excellent progress growing share
in the builder and home center channels, and by adding Omega's
established positions among top-tier customers in the dealer channel
and in the upscale design centers, we'll increase our presence in
these important channels, as well. Second, we'll broaden our product
line with Omega's core expertise in custom and frameless semi-custom
cabinetry, which complements our current strength in semi-custom,
stock and frameless ready-to-assemble cabinets. By adding these new
centers of excellence, we'll have a portfolio of products second to
none. And third, The Omega Group brings great people - a
high-performance management team and an excellent workforce - who will
be tremendous contributors to our future growth together."
In its other key distribution channels, Fortune Brands' cabinet
unit has developed new customer business to become a supplier to nine
of the ten largest North American homebuilders and a stronger partner
with the three largest home center chains. Fortune Brands recently
announced that The Home Depot has selected MasterBrand Cabinets as the
sole supplier for its exclusive Thomasville line of cabinets. As a
result, the company's business with The Home Depot will expand from
600 stores to 1400 stores. In addition, The Omega Group brings to
Fortune Brands premier positions at growing upscale design centers,
including EXPO Design Centers and The Great Indoors, as well as an
expanded position in the Canadian market.
Acquisition Solidly Accretive in 2002
The purchase price for The Omega Group is $538 million. "We expect
the addition of The Omega Group, which we are purchasing within our
targeted valuation range, will generate attractive returns and
excellent value for our shareholders," Wesley said. "We're targeting
accretion in the range of 8 to 10 cents per share in 2002, with even
greater benefits in 2003 and beyond."
The Omega Group is headquartered in Waterloo, Iowa and operates
production facilities in Waterloo, as well as in Winnipeg, Manitoba;
Goshen, Indiana; and Clinton, Tennessee.
The acquisition is subject to customary closing conditions and
regulatory approvals, and is expected to close within the next few
weeks.
Fortune Brands, Inc. is a consumer products company with annual
sales exceeding $5 billion. Its operating companies have premier
brands and leading market positions in home and hardware products,
office products, golf equipment and spirits and wine. Home and
hardware brands include Moen faucets, Aristokraft and Schrock
cabinets, Master locks and Waterloo tool storage sold by units of
MasterBrand Industries, Inc. Major spirits and wine brands sold by
units of Jim Beam Brands Worldwide, Inc. include Jim Beam and Knob
Creek bourbons, DeKuyper cordials, The Dalmore single malt Scotch, Vox
vodka and Geyser Peak and Canyon Road wines. Acushnet Company's golf
brands include Titleist, Cobra and FootJoy. Office brands include
Day-Timer, Swingline, Kensington and Wilson Jones sold by units of
ACCO World Corporation. Fortune Brands, headquartered in Lincolnshire,
Illinois, is traded on the New York Stock Exchange under the ticker
symbol FO and is included in the S&P 500 Index.
To receive company news releases by e-mail, please visit
www.fortunebrands.com.
This press release contains statements relating to future results,
which are forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. Readers are
cautioned that these forward-looking statements speak only as of the
date hereof. Actual results may differ materially from those projected
as a result of certain risks and uncertainties, including but not
limited to changes in general economic conditions, foreign exchange
rate fluctuations, changes in interest rates, competitive product and
pricing pressures, trade consolidations, the impact of excise tax
increases with respect to distilled spirits, regulatory developments,
the uncertainties of litigation, changes in golf equipment regulatory
standards, the impact of weather, particularly on the home products
and golf brand groups, expenses and disruptions related to shifts in
manufacturing to different locations and sources, challenges in the
integration of acquisitions and joint ventures, as well as other risks
and uncertainties detailed from time to time in the Company's
Securities and Exchange Commission filings.
--30--as/cgo*
CONTACT: Fortune Brands, Inc.
Clarkson Hine, 847/484-4415 (Media Relations)
or
Anthony J. Diaz, 847/484-4410 (Investor Relations)
This information is provided by RNS
The company news service from the London Stock Exchange
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