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Sawaya Segalas News
December 16, 2010
Prestige Announces Agreement to Acquire the Dramamine Brand from McNeil-PPC, Inc.
 

IRVINGTON, N.Y. — Prestige Brands Holdings, Inc. ("Prestige Brands" or "Prestige") (NYSE: PBH), a leading marketer of branded consumer products, today announced that it has entered into a definitive agreement to acquire the assets associated with the Dramamine& business in the U.S. ("Dramamine") from McNeil-PPC, Inc. for $76 million in cash. The transaction is expected to generate tax attributes with a present value of approximately $14 million, which would imply an effective purchase price of approximately $62 million. The transaction is subject to customary closing conditions, including clearance under the Hart-Scott Rodino Antitrust Improvements Act of 1976 and is expected to close prior to the end of January 2011.
 
Dramamine is the #1 brand in the OTC-motion sickness category in the U.S. with an estimated market share of approximately 32%. Dramamine products are used for the prevention and treatment of nausea, vomiting and dizziness symptoms associated with motion sickness. The addition of this leading well-known brand further strengthens Prestige's presence in the OTC arena.
 
"Strategic acquisitions in the OTC market are core to our shareholder value creation strategy. Dramamine represents a continuation of our strategy to acquire OTC brands that are broadly recognized by consumers, are important to retailers, and have strong positions in their categories. We are strengthening Prestige's portfolio of leading brands in attractive OTC categories with the addition of Dramamine," said Matthew Mannelly, Prestige Brands Chief Executive Officer.
 
"The Company expects to quickly and smoothly integrate Dramamine into the Prestige portfolio and drive growth through enhanced brand support. Prestige has made a significant commitment to invest behind our key brands in the portfolio and intends to extend this investment philosophy to Dramamine when the acquisition is completed," continued Mannelly.
 
To fund the Dramamine transaction, Prestige will use cash on hand and funds made available through the bank and bond financing recently completed to fund Blacksmith Brands and other acquisitions. For the Blacksmith transaction, Prestige had originally anticipated using an all bank debt structure. However, due to favorable market conditions and this additional acquisition opportunity, the Company elected to pursue an expanded and more flexible bank and bond financing at a modestly higher cost.
 
The acquisition is expected to be accretive to earnings per share in FY2012. Prestige intends to provide an update on the Blacksmith Brands integration as well as the Dramamine acquisition at its next earnings call scheduled for February 3, 2011.
 
Sawaya Segalas & Co., LLC is acting as exclusive financial advisor to Prestige with respect to the transaction.
 
About Prestige Brands
Prestige Brands markets and distributes brand name over-the-counter healthcare and household cleaning products sold throughout the U.S., Canada, and in certain international markets. Key brands include Chloraseptic& sore throat remedies, Clear Eyes& eye care products, Compound W& wart removal treatments, The Doctor's& NightGuard& dental protector, Little Remedies& and PediaCare& lines of pediatric over-the-counter products, Efferdent& and Effergrip& denture care products, Luden's& cough drops, NasalCrom& allergy treatment, and Comet& and Spic and Span& household cleaners.
 

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