(Corrects to Varta from Vatra in first paragraph)
Jan 16 (Reuters) - Battery maker Energizer Holdings Inc said on Tuesday it would buy the battery and portable lighting business of Spectrum Brands in a $2 billion cash deal, adding brands such as Rayovac and Varta to its lineup.
The deal comes two weeks after Spectrum said it was exploring strategic options, including a sale, for its global batteries and appliances businesses.
Shares of Energizer, known for the Energizer and Eveready batteries, were up 5.8 percent in premarket trading on Tuesday, while Spectrum’s shares were up 1.2 percent.
Spectrum said it was still “actively marketing” its appliances business, which includes brands such as George Foreman cookware and Remington grooming products.
The company’s battery and portable lighting business generated revenue of $866 million in 2017, accounting for 17 percent of the total revenue. The unit posted earnings before interest tax, depreciation and amortization (EBITDA) of $169 million.
Spectrum said the sale will allow it to focus on its remaining businesses - hardware, auto care and pet and gardening products.
For Energizer, the deal adds heft to its batteries unit, while also expanding its international business.
Spectrum said it expects to use proceeds to pay down debt, reinvest in its core businesses both organically and through bolt-on acquisitions, and repurchase shares.
Energizer said it intends to fund the deal through existing cash and committed debt facilities, expected to consist of a new term loan and senior notes.
Barclays was the financial adviser to Energizer, while RBC Capital Markets advised Spectrum Brands. The deal is expected to close before the end of this year, the companies said. (Reporting by Munsif Vengattil and Sanjana Shivdas in Bengaluru; Editing by Saumyadeb Chakrabarty)