Middleton-based home essentials company Spectrum Brands said Friday it has entered into an agreement with New Jersey-based firm Tristar Products to acquire its home appliances and cookware categories for at least $325 million in cash.
The company said it would pay an additional $125 million if certain profit targets are met in 2022. The deal, including cookware brands Power XL, Emeril Lagasse and Copper Chef, is to be funded by a combination of cash on hand, as well as a $500 million loan. The acquisition is expected to close within 90 days, Spectrum Brands said Friday.
In a Friday morning conference call with investors, CEO David Maura said Spectrum Brands plans to combine its purchase of the appliance and cookware categories with its Home and Personal Care segment, and create a new stand-alone company. Spectrum Brands would then solely encompass its Global Pet Care and Home & Garden businesses. Maura said during the call that the deal paves the way for further acquisitions “in this space.” The company did not disclose how the transaction impacts Tristar employees who work for the home appliances and cookware categories, nor further details about the new company, but said it will update investors later this year.
“The strategic combination of the Tristar Business with our HPC segment represents an exciting key milestone in our pursuit to create a leading higher-margin and faster-growing company in the global appliances market,” Maura said in a statement Friday. “The Tristar Business brings us a fantastic content creation studio, incredible DRTV capabilities and adds a direct-to-consumer distribution business that we believe can meaningfully lift HPC’s margins and growth rate. For some time, we have been seeking to successfully execute on an accretive transaction in this space and are pleased that this acquisition allows us to create a global appliances leadership platform.”
The purchase comes as Spectrum Brands announced its first-quarter results Friday, and after the company sold its Hardware & Home Improvement Segment to Sweden-based ASSA ABLOY for $4.3 billion in September. Maura said Friday during the call that the company remains “confident” that transaction will close this year.
Spectrum Brands reported Friday net income of $8.2 million in its fiscal first quarter, despite continued COVID supply chain disruptions and constraints.
The company posted revenue of $757.2 million in the period, and its stock price closed at nearly $89 on Friday.
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