Spectrum Brands Holdings signed a definitive merger agreement to acquire Armored AutoGroup Parent from Avista Capital Partners for $1.4 billion in cash and assumed debt.
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Armored AutoGroup is a consumer products company consisting primarily of the renowned Armor All and STP brands, two of the most recognizable brands in the automotive aftermarket appearance products and performance chemicals/additives categories, and the market-leading A/C PRO brand in the do-it-yourself automotive air conditioner recharge category.
Armor All has the #1 U.S. market share in the appearance products category with its line of protectants, wipes, tire and wheel care products, glass cleaners, leather care products, air fresheners and washes. A/C PRO holds the #1 U.S. position in the DIY air conditioner recharge category.
STP has the #3 U.S. market share in the performance chemicals category and offers a line of oil and fuel additives, functional fluids and automotive appearance products for a wide array of customers ranging from professional racers to car enthusiasts to do-it-yourself consumers.
Including synergies from its acquisition of the A/C PRO business from IDQ Acquisition Corp. in March 2014, other synergies and organic growth, Armored AutoGroup is expected to generate net sales of more than $440 million and adjusted EBITDA in excess of $140 million for the calendar year ending December 31, 2015.
Nearly 80 percent of Armored AutoGroup’s annual revenues are generated in the U.S., primarily through auto retailers, mass merchandisers, home improvement centers and dollar stores.
The $1.4 billion cash purchase price and associated transaction fees and expenses are expected to be funded through a combination of new debt and approximately $500 million of Spectrum Brands common stock, including equity to be purchased by HRG Group, Inc. As part of the transaction, Spectrum Brands has received debt financing commitments from Credit Suisse, Deutsche Bank and Jefferies.
Following the closing of the transaction, Armored AutoGroup is expected to operate as a separate division within Spectrum Brands, reporting to Chief Executive Officer Andreas Rouvé.
The transaction has been unanimously approved by the board of Spectrum Brands and approved by the board and by shareholders of Armored AutoGroup, and is expected to close before the end of Spectrum Brands’ fiscal third quarter on June 30, 2015, subject to receipt of applicable regulatory approvals and customary closing condition. ■
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