Thursday night U.S. #2 battery maker Energizer Holdings announced it had agreed to buy hygiene product maker Playtex Products for $1.2 billion in cash, or $1.9 billion including debt. The buyout offer, which works out to $18.30 a share, adds an 18% premium to Playtex's closing price Thursday of $15.52. Both companies' boards have already unanimously approved the merger. Energizer CEO Ward M. Klein said in the press release the companies have "similar customers and distribution channels in the U.S. and Canada," adding the acquisition may lead to others. In the hygiene department, Energizer already owns Schick-Wilkinson Sword men's shaving; the Playtex acquisition gives it several household names including Playtex brand tampons, Wet Ones baby wipes and Banana Boat and Hawaiian Tropic sunscreen. Despite seeing its share price increase 89% over the last year, Energizer reported last quarter that rising Zinc prices, used widely in the manufacture of batteries, had cut into its profit margins. The Playtex acquisition is expected to close by year's end.
Sources: Press Release, Reuters, Bloomberg, Financial Times Alphaville
Commentary: Cramer's Take on ENR • Energizer Holdings: Worth at Least $7.5 Billion
Stocks/ETFs to watch: Playtex Products (PYX), Energizer Holdings (NYSE:ENR). Competitors: The Procter & Gamble Company (NYSE:PG), Kimberly-Clark Corporation (NYSE:KMB), Spectrum Brands (SPC). ETFs: PowerShares DWA Technical Leaders (NYSEARCA:PDP), PowerShares WilderHill Progressive Energy (NYSEARCA:PUW)
Related: Playtex Products
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