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Energizer To Split Into Two Public Traded Companies

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Energizer Holdings, Inc. (NYSE:ENR) announced Wednesday that its board of directors has approved  a plan to split the company’s household products and personal care products into two publicly traded companies.

The company anticipates the separation to help the businesses intensify focus on commercial priorities and better allocate resources.

Energizer impressive range of products

Energizer Holdings, Inc. (NYSE:ENR) headquartered in St. Louis, Missouri, is a consumer goods company operating globally in the broad categories of personal care and household products.

In 2002 100% of Energizer Holdings’ business came from selling batteries; granted these widely recognized Energizers translated to nearly $2 billion in revenue and just over $300 million in profit.  Yet today Energizer receives just 46% of its sales from batteries. Instead, Energizer Holdings has been actively acquiring personal care businesses and can now boast about representing 5 different product categories. Specifically, Energizer Holdings owns the Schick, Edge, Diaper Genie, Wet Ones, Playtex, Hawaiian Tropic and Banana Boat brands – not to mention an additional value-oriented battery line as well.

While unveiling its plans to split Wednesday, it said it plans to separate into two publicly traded companies, one for batteries and other household products and the other for personal care brands such as Schick razors and Stayfree female hygiene products.

Move to shift away from batteries

Energizer Holdings, Inc. (NYSE:ENR)’s battery sales have declined amid increasing competition and growing demand for rechargeable batteries used in mobile devices. Its household product sales fell 15.8% to $373.4 million, primarily due to the loss of two U.S. retail customers and higher promotional spending, in the second quarter ended March 31.

Steve Ferazani and team at Institutional Research Group believe the spin-off transaction is expected to be completed in mid-2015, according to In a note sent out to clients yesterday. The spin-off still requires an effectiveness declaration of the company’s Form 10 filing, regulatory approvals, a favorable opinion from counsel on the tax-free status of the spin-off, and final approval by the Board. They note that “battery sales have been relatively stagnant over the last three years, likely masking modest growth for  hygiene products”, and that applying “the peer group 2.4x to Personal  Care annual sales of $2.6 billion provides an enterprise value of $6.2 billion”.

The household-products company would be anchored by Energizer Holdings, Inc. (NYSE:ENR) and Eveready batteries and include gadgets like flashlights and charges. These products derived revenue of $1.9 billion in the 12 months that ended in March. The other company, the personal care products derived $2.6 billion in sales over the same period.

Serena NG and Erin Mccarthy of The Wall Street Journal believe down the road, the battery-selling side and razor-focused company to be takeover targets.


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