Rayovac Corp. (Madison, WI) announced that it has reached an agreement to acquire United Industries Corp. (St. Louis, MO). The transaction calls for Rayovac to issue 13.75 million shares of its common stock, along with additional consideration of $70 million in cash, to United Industries' current shareholders, for a total value of approximately $1.2 billion including the assumption of approximately $880 million of United Industries debt and a cash tax benefit of $140 million.
The company noted that the United transaction will significantly diversify Rayovac's revenue base. It is expected that after closing, worldwide battery sales will represent approximately 40% of total combined pro-forma revenue versus the current level of approximately 67%.
"Rayovac's publicly stated goal has been to grow through acquisitions that diversify and increase our revenue base while leveraging our global merchandising and distribution capabilities. United Industries is just such an acquisition," stated Rayovac Chairman and Chief Executive Officer David Jones. "Upon closing, we will have a significant presence in several new consumer products markets -- large growth categories where we can capitalize on our strengths with major retailers to leverage the full potential of the powerful combined enterprise."
