Blog Coverage Newell Brands Continues its Reshuffle; Makes Two Purchases for a Combined $570 Million

Upcoming AWS Coverage on Helen of Troy

LONDON, UK / ACCESSWIRE / December 13, 2016 / Active Wall St. blog coverage looks at the headline from Newell Brands Inc. (NYSE: NWL) as the Company announced on December 12, 2016, two acquisitions worth a combined $570 million as the maker of Rubbermaid products continues to refine its portfolio after the divesture of its Tool Business. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

One of Newell Brands’ competitors within the Housewares & Accessories space is Helen of Troy Ltd. (NASDAQ: HELE). AWS will be initiating a research report on Helen of Troy in the coming days.

Today, AWS is promoting its blog coverage on NWL; touching on HELE. Get all of our free blog coverage and more by clicking on the links below:

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The Agreement

Newell Brands announced it has entered into a definitive agreement to acquire New Zealand-based Sistema Plastics, primarily under the Sistema® brand, a leading provider of innovative food storage container, for NZ$660 million (US$470 million). Newell Brands stated that Sistema is one of the fastest-growing brands in the Food Storage category, with annual sales of approximately $145 million. Its innovative products are available worldwide, including in several major markets where Newell Brands’ Rubbermaid® food storage products are not currently available, creating significant potential for geographic expansion. Sistema has also been expanding into the fast-growing Beverages category, another area of strategic focus for Newell Brands. Additionally, Sistema will soon complete a state-of-the-art manufacturing facility in New Zealand that will enable Newell Brands to meet the capacity needs created by continued category growth.

Furthermore, the company also announced the acquisition of Smith Mountain Industries, a leading provider of premium home fragrance products, primarily under the WoodWick® Candle brand, for $100 million. WoodWick Candle is a fast-growing brand in the Home Fragrance category, with annual sales of approximately $65 million.

Newell Brands stated that both businesses are growing at rates well above the Company’s core sales growth rate and are expected to be immediately accretive to normalized earnings.

“These two bolt-on acquisitions strengthen our leadership positions in three of our most important Win Bigger categories, Food Storage, Beverage and Home Fragrance,” said Newell Brands CEO Michael Polk, “We will apply our advantaged Newell Brands’ capabilities and scale to further both businesses’ already strong performance.”

The Refocus on Portfolio

In October 2016, Newell Brands has announced the divestiture of about 10% of its portfolio (about $1.5 billion of annualized revenue), including its Tools business to Stanley Black & Decker for $1.95 billion. The company expects to complete the divestitures in H1 2017. The company noted that these divestitures and the acquisitions of WoodWick and Sistema brands are part of the company’s ongoing effort to both simplify and strengthen the portfolio. In December 2015, the company then called Newell Rubbermaid Inc. acquired Jarden Corp. for approximately about $15.4 billion.

Newell Brands announced that both acquisitions will be funded from cash on hand at the time of closing. The company stated that these acquisitions will not impact the net proceeds from planned divestitures which will be used primarily for accelerated debt repayment as part of the Company’s goal to achieve the stated leverage ratio goal of 3 to 3.5 times EBITDA by the end of 2018. Newell Brands expects to complete the Sistema transaction in Q2 2017, while it is expecting to wrap up WoodWick Candle transaction is in Q1 2017. Both transactions are subject to customary closing conditions, including regulatory approvals in the case of Sistema.

Stock Performance

At the close of trading session on December 12, 2016, following the announcement, Newell Brands’ stock price rose 2.09% to end the day at $46.48. A total volume of 3.65 million shares were exchanged during the session. The company’s share price has gained 7.20% on an YTD basis. The stock currently has a market cap of $22.25 billion. The company’s shares are trading at a PE ratio of 86.39 and have a dividend yield of 1.64%.

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