Ascendia Brands to Acquire the Healing Garden and Calgon from Coty

2007-01-18 | 08:21

Ascendia Brands, Inc., has entered into a definitive agreement to acquire the healing garden and Calgon brands and brand-related assets from Coty Inc. and certain affiliates. Ascendia anticipates that the acquisition will almost double annual revenues, to approximately $200 million, and will be accretive to Ascendia's earnings for its 2008 fiscal year. The price at closing will be $125 million. In addition, the asset purchase agreement includes "earn-out" provisions under which Ascendia could become obligated to pay Coty up to an additional $15 million in cash and to issue up to an additional $5 million in subordinated debt in July 2009. Calgon and the healing garden are the number one and number two brands respectively in the specialty bath sector based on annual sales and the acquisition will strengthen Ascendia's leadership position in the overall bath category, according to the company. Ascendia's existing Lander and Lander Essentials brands hold the number one position in the basic bath segment and its Mr. Bubble and Lander Kids brands are the leading product lines in the children's bath segment. "The acquisition of the healing garden and Calgon will enable us to build on our strategy of expanding our premium value brand offerings and will solidify our position as a leader in the bath and specialty bath categories," said Joseph A. Falsetti, chairman and chief executive officer of Ascendia. "We expect this acquisition will create attractive strategic and financial synergies as we continue to grow our business.” Bernd Beetz, Coty Inc.'s chief executive officer said: "While we respect these brands and their contribution to our success, Coty constantly reviews its portfolio mix, and the strategic fit of its brands, emphasizing global versus local brands, especially in the fragrances and cosmetics businesses. Hence, Coty will continue to acquire and selectively divest brands in accordance with our overall business strategy. We expect that the focus Ascendia will bring to these brands will provide the best opportunity for these brands to flourish in the marketplace." The acquisition is expected to close prior to March 1, 2007, subject to the completion of acquisition financing, and fulfillment of other customary closing conditions.