Newell Brands is continuing to shake up its businesses, reaching an agreement to sell consumer and commercial package manufacturing unit The Waddington Group for about $2.3 billion and putting its Jostens and Pure Fishing brands on the market.
Novolex Holdings LLC, a provider of paper and packaging products that is a Carlyle Group business, has reached a definitive agreement to buy the Covington, Kentucky-based Waddington Group, Newell said in a news release. The Waddington Group includes the Eco-Products, POLAR PAK and WNA brands, among others.
“We are pleased with today’s announced sale of The Waddington Group to Novolex,” Newell CEO Michael Polk said in a prepared statement. “This mutually beneficial deal allows the Waddington team to unlock its full potential under a new owner who is committed to the packaging category, and provides Newell Brands the opportunity to take an important first step forward in our Accelerated Transformation Plan.”
Newell’s Accelerated Transformation Plan is intended to create a simpler, faster, stronger consumer-focused portfolio of leading brands, the company said.
Under the plan, Newell intends to restructure into a $9 billion-plus global consumer products company, featuring seven core consumer divisions:
- Appliances & Cookware;
- Outdoor & Recreation;
- Home Fragrance; and
- Safety & Security.
As a result, the company intends to sell several of its noncore businesses, which account for about 35 percent of the current net sales. They include:
- Pure Fishing;
- Rubbermaid Commercial Products;
- The Waddington Group;
- Process Solutions;
- Rubbermaid Outdoor/Closet/Refuse & Garage; and
- U.S. Playing Cards.
“Our actions to focus the portfolio and create a global consumer goods company with net sales of greater than $9 billion will create significant value for shareholders through the strengthening of our operating performance and financial flexibility, and the return of capital to shareholders from divestiture proceeds,” Polk said. “We are acting decisively to make Newell Brands a simpler, stronger and faster company, best positioned to leverage our competitively advantaged capabilities in innovation, design and e-commerce.”
The company said it expects all transactions by year-end 2019, resulting in net sales of approximately $9.5 billion in 2020. The sale of The Waddington Group is expected to close in about 60 days, pending customary approvals and conditions.
Newell will reduce manufacturing facilities by 66 percent, distribution centers by 55 percent, brands by 45 percent and employees by 39 percent as a result of the plan, it said.
The company also said net sales were $3 billion for the first quarter of 2018, down 7.6 percent from the first quarter of 2017, while diluted earnings came in at 11 cents per share, down from $1.31, and normalized diluted earnings were 34 cents per share, flat to the year-ago period. A variety of transactions tied to the transformation affected quarterly results.
JPMorgan Securities LLC was Newell’s financial adviser on the Waddington Group deal.