Energizer to separate into two companies
ST. LOUIS — Energizer Holdings on Wednesday announced that it's pursuing a plan to divide the company's household products and personal care divisions into two independent, publicly traded companies.
Household products (batteries and portable lighting products) is expected to produce strong margins and significant cash flows and will be secured by the well-known Energizer and Eveready brands. This division reported annual revenue of $1.9 billion in the 12-month period ending March 31, 2014.
The personal care division is expected to be a leading "pure-play" consumer products company, with a roster of established brand names that includes Schick, Wilkinson Sword, Edge, Skintimate, Playtex, Stayfree, Carefree, O.B., Banana Boat and Hawaiian Tropic. Annual revenue for the personal care division was $2.6 billion in the 12-month period ended March 31, 2014.
"Over the last three years, we have taken a number of important steps to enhance shareholder value, including executing a multi-year cost reduction plan, improving working capital and initiating a dividend," said Ward Klein, CEO. "The Energizer board of directors and management team have continually explored opportunities to improve performance and increase long-term shareholder value and believe that separating the household products and personal care divisions is the next logical step to unlock even greater value for Energizer shareholders. Importantly, as we move through the separation process, the company's working capital and cost reduction efforts will continue without interruption, and we expect to achieve the full savings projected."
Energizer said creating two public companies brings a wealth of benefits to the standalone business. It expects the household products division will generate value by leveraging its battery and lighting brands to generate significant cash flows, reiterating that its product categories remain important basket builders for retailers. Personal care will build on its stable of leading global products to create value. The personal care category has strong positions in large, developed markets, the company noted.
Once the separation is complete, Klein is expected to serve as executive chairman of the board of standalone personal care. David Hatfield, who is the current president and CEO of Energizer personal care, is expected to serve as CEO of the standalone personal care company. J. Patrick Mulcahy, currently chairman of the board, is expected to serve as executive chairman of the board of standalone household products. Alan Hoskins, currently president and CEO of Energizer household products, is expected to serve as CEO of standalone household products.