Prestige buys Insight Pharmaceuticals for $750 million, expands portfolio
TARRYTOWN, N.Y.-. — Prestige Brands Holdings, whose portfolio includes Chloraseptic sore throat treatments, Clear Eyes eye care products and Compound W wart treatments, has entered into an agreement to acquire Insight Pharmaceuticals, the maker of Monistat, for $750 million in cash.
As part of the transaction, Prestige will acquire tax attributes with a present value of approximately $100 million, which results in an effective purchase price of approximately $650 million. This transaction, combined with the Hydralyte transaction announced on April 15, is expected to result in pro forma revenues and adjusted EBITDA of approximately $800 million and $300 million, respectively for the company in fiscal 2015.
The transaction will extend Prestige’s portfolio of OTC brands to include Insight’s feminine care platform anchored by Monistat, an OTC yeast infection treatment. Insight’s portfolio also includes EPT home pregnancy test products and other feminine care brands. The acquisition will give Prestige a leading platform in feminine care in the United States and Canada, while also adding other OTC brands to its cough-cold, pain relief, eye and ear, and dermatological platforms.
The transaction is expected to be immediately accretive to the company’s earnings per share and free cash flow per share, exclusive of transaction, integration and purchase accounting items. The company anticipates closing on this transaction during the first half of this fiscal year, subject to customary closing conditions, including clearance under the Hart-Scott Rodino Antitrust Improvements Act of 1976.
“The acquisition of Insight Pharmaceuticals will add the attractive new feminine care platform to the Prestige portfolio. The platform is anchored by Monistat, the No. 1 brand in its category and the brand recommended most by doctors. Monistat will become the company’s largest and its first $100 million brand,” stated Matthew Mannelly, CEO of Prestige Brands.
He added, “The acquisition is expected to boost Prestige’s annual revenues to approximately $800 million, bringing us closer to our stated goal of becoming a billion dollar OTC products company. We expect that our already industry-leading free cash flow and EBITDA margins will further strengthen as a result of the acquisition of Insight. Our excellent financial profile and strong free cash flow will enable us to rapidly de-lever, consistent with our prior acquisitions.”
Insight Pharmaceuticals is a portfolio holding of Swander Pace Capital and its co-investment partner, Ontario Teachers’ Pension Plan.
Scott, Williams to leave Walmart board
BENTONVILLE, Ark. — Former Walmart CEO Lee Scott and Audit Committee chairman Christopher Williams will step down from the retailer’s board in June.
Scott stepped down as CEO in early 2009 after joining Walmart in 1979. Walmart said Scott’s departure was in keeping with its historical practice of board service for prior CEO’s. It also helps the company avoid having too many insiders on the board as former CEO Mike Duke is on the board as is Doug McMillion who succeeded Duke as CEO earlier this year.
Williams served on the board for the past 10 years, the last two of which have been more like a full time job. Williams served as chairman of the four member Audit Committee tasked with investigating and overseeing matters related to alleged violations of the Foreign Corrupt Practices Act.
The Audit Committee met 22 times last year, making Williams the most highly compensated board members with $348,000 in pay, and oversaw the expenditure of $282 million related to FCPA matters. That was on top of the 15 Audit Committee meetings held the prior year and expenditures of $157 million.
Walmart did not indicate who would replace Williams as chair of the Audit Committee.
Nielsen inks new beauty market agreement with the NPD Group
NEW YORK — Nielsen has teamed up with the NPD Group, a global information company, to jointly produce the quarterly U.S. Beauty Cross Channel Monitor.
The report reviews the U.S. beauty market performance, providing a market view spanning both the prestige and mass retail channels.
“The new agreement allows Nielsen and NPD to offer clients an unparalleled depth of insight and actionable intelligence,” stated John Lewis, president, Americas, Nielsen. “This will enable clients to make more informed business decisions and capitalize on new market opportunities.”
“We are committed to delivering the best information, insights, and solutions for our clients in all of the industries we serve,” added Karyn Schoenbart, president and COO, NPD. “We look forward to collaborating with Nielsen on this critical overview of the beauty marketplace.”
The Beauty Cross Channel Monitor will combine Nielsen and NPD point-of-sale data across food, drug, prestige department stores, and all retail outlets combined, providing a read on sales and performance for all beauty categories including dollar sales, unit sales and average retail price, in addition to a ranking of the top 75 to 100 brands.
The two organizations have worked together closely to create more refined product definitions, creating a more comprehensive view of product performance. This will allow brand marketers to better evaluate the performance of categories, segments and brands across major beauty distribution channels to better understand and respond to new U.S. beauty market opportunities, the companies stated.
This is the second market information agreement between Nielsen and the NPD Group in 2014. The two firms are collaborating in the offices supplies market. As part of that arrangement, Nielsen is serving as NPD’s preferred analytics partner for NPD clients in the office supplies market.