Dial Corporation Sells SPC Unit

The fire sale is on at Dial. The company today announced the sale of its Specialty Personal Care (SPC) businesses, the Sarah Michaels and Freeman Cosmetics personal care brands, to a subsidiary of the Hathi Group, Chicago, an operator of packaging, medical equipment and personal care product companies. Hathi currently owns and operates the Kirk’s Castile Soap brand, purchased from Procter & Gamble in 1996. The sale of SPC is in line with the Company’s strategy to fix or jettison under-performing businesses.

Terms of the agreement were not disclosed; however, Dial said it expects the write-off from the transaction to be approximately $200 million after tax. Dial previously disclosed that the expected write-off would be in the range of $180 million to $200 million after tax. The Company will remain in compliance with all debt covenants following the completion of the transaction. Cash proceeds from the sale will be used to pay down debt. For reporting purposes, SPC will now be recorded as a discontinued business, and therefore the sale will be accretive approximately $0.03 per share to earnings from continuing operations in fiscal year 2001.

“Since joining the company last August, my highest priority has been to reposition Dial for profitable growth,” said Herbert M. Baum, chairman, president and chief executive officer of The Dial Corporation. “With the sale of SPC we have jettisoned our most troubled business, and will now be able to better focus on growing our core brands and lowering our operating costs and interest expense.”