Energizer to buy SC Johnson shaving cream business
CHICAGO (Reuters) - Energizer Holdings Inc (ENR.N) said on Monday that it planned to buy S.C. Johnson & Son Inc's Edge and Skintimate brands for $275 million, adding shaving creams and gels to its Schick-Wilkinson Sword razor business.
Shares of Energizer fell more than 7 percent as investors reacted to the company's latest acquisition and plans for a new offering of 9.5 million shares.
If the common stock offering is not successful, Energizer said it would give privately held S.C. Johnson $310 million in nonvoting redeemable preferred shares, along with semiannual dividends, instead of the $275 million in cash.
St. Louis-based Energizer, best known for its batteries, is no stranger to using acquisitions to expand into new areas. It got into the razor business when it bought Schick-Wilkinson Sword from Pfizer Inc (PFE.N) in March 2003. More recently, it bought Playtex Products Inc, the maker of tampons, baby care items and suntan lotion, in October 2007.
Energizer's razor business ranks second behind Procter & Gamble Co's (PG.N) Gillette, which sells its own shaving creams and gels.
Energizer said it aims to market Edge and Skintimate along with its razors, which include Quattro. Energizer noted in its quarterly report on Monday that the Edge and Skintimate business "has suffered significant market share declines over the past ten years."
Energizer said it would use the net proceeds from the offering of 9.5 million shares to pay for the deal and for general corporate purposes, including the repayment of debt.
The offering includes an option for the underwriters to buy up to 1.425 million more shares to cover any overallotments, Energizer said.
Deutsche Bank Securities Inc (DBKGn.DE) was Energizer's financial adviser on the deal with S.C. Johnson. On the stock offering, J.P. Morgan (JPM.N), Merrill Lynch & Co and Deutsche Bank are joint book-running managers, while Moelis & Co LLC acted as financial adviser.
Shares of Energizer were down 7 percent at $52.51 after falling as low as $52.13 in morning trading on the New York Stock Exchange.
(Reporting by Jessica Wohl; Editing by Lisa Von Ahn, Dave Zimmerman)
