Newell Brands to Acquire New Zealand-based Sistema Plastics for NZ$660 Million

Tuesday, Dec 13, 2016

Newell Brands Inc. announced it has entered into a definitive agreement to acquire New Zealand-based Sistema Plastics, a leading provider of innovative food storage containers, primarily under the Sistema® brand, for NZ$660 million (US$470 million). Additionally, the company has entered into a definitive agreement to acquire Smith Mountain Industries, a leading provider of premium home fragrance products, primarily under the WoodWick® Candle brand, for $100 million. Both businesses are growing at rates well above Newell Brands’ core sales growth rate and are expected to be immediately accretive to normalized earnings.

“These two bolt-on acquisitions strengthen our leadership positions in three of our most important Win Bigger categories, Food Storage, Beverage and Home Fragrance, said Newell Brands CEO Michael Polk. “We will apply our advantaged Newell Brands’ capabilities and scale to further both businesses’ already strong performance.”

"We have a proven track record of accelerating the growth of businesses that we acquire in our core categories,” said Mark Tarchetti, President of Newell Brands. “Sistema and WoodWick are both design and innovation driven brands that are already generating very strong top-line growth and highly attractive margins. We look forward to integrating these brands into our portfolio as we continue to reshape our company to deliver transformative value creation.”

Based in New Zealand, Sistema is one of the fastest-growing brands in the Food Storage category, with annual sales of approximately $145 million. Its innovative products are available worldwide, including in several major markets where Newell Brands’ Rubbermaid® food storage products are not currently available, creating significant potential for geographic expansion. Sistema has also been expanding into the fast-growing Beverages category, another area of strategic focus for Newell Brands. Additionally, Sistema will soon complete a state-of-the-art manufacturing facility in New Zealand that will enable Newell Brands to meet the capacity needs created by continued category growth.

WoodWick Candle is a fast-growing brand in the Home Fragrance category, with annual sales of approximately $65 million. WoodWick’s innovative scented candles “crackle as they burn” and offer a strong strategic fit with Newell Brands’ current Home Fragrance portfolio, which includes the category-leading Yankee Candle® brand.

Both acquisitions will be funded from cash on hand at the time of closing. Neither acquisition is expected to draw on the U.S.-based net proceeds from planned divestitures which will be used primarily for accelerated debt repayment as part of the Company’s commitment to achieve the stated leverage ratio goal of 3 to 3.5 times EBITDA by the end of 2018. Both transactions are subject to customary closing conditions, including regulatory approvals in the case of Sistema. The Sistema transaction is expected to close in the second quarter of 2017, while the WoodWick Candle transaction is expected to close in the first quarter of 2017.

Cameron Partners Ltd. and Rothschild Inc. acted as financial advisors to Newell Brands on the acquisition of Sistema.

The company has previously announced the intention to divest about 10 percent of its portfolio (about $1.5 billion of annualized revenue), including its Tools business which it has agreed to sell to Stanley Black & Decker for $1.95 billion. The company expects to complete the divestitures in the first half of 2017. These divestitures and today’s announced agreements to acquire the WoodWick and Sistema brands are part of the company’s ongoing effort to both simplify and strengthen the portfolio.



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