Helen of Troy Buys Healthy Directions, Enters Health Biz - Analyst Blog

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Helen of Troy ( HELE ) completed the acquisition of U.S.-based retailer and health publisher Healthy Directions, LLC and its subsidiaries for a cash transaction worth $195 million. Healthy Directions will continue to operate from Bethesda, MD under the current management team. This takeover will facilitate Helen of Troy's entry into the vitamins, minerals and supplements (VMS) category.

The Healthy Directions acquisition is expected to be accretive to revenues by more than 10% on an annualized basis and also affect cash flow, adjusted EBITDA and adjusted earnings per share positively.

Healthy Directions will bring with it several highly acclaimed physicians and nutritional experts in heart health, digestive health, joint health, skin care and vision support into Helen of Troy's health and wellness category.

The future of the VMS business seems bright becauseaccording to Nutrition Business Journal, more than 70% of U.S. population aged 55 and above took vitamin supplements in 2013. In addition, the VMS market is expected to continue growing at a mid-to-high single digit rate annually through 2020. The acquisition thus seems beneficial for Helen of Troy.

The Healthy Directions acquisition is a strategic fit for Helen of Troy currently carrying a Zacks Rank #2 (Buy) as it is geared to bolster its presence in the health and wellness category. In this regard, the consumer products company acquired subsidiaries like Kaz (healthcare devices and home comfort products) in Dec 2010 and PUR (manufacturer of water purifier) a year later from The Procter & Gamble Co. ( PG ).

J.P. Morgan Securities LLC of JPMorgan Chase & Co. ( JPM ) acted as the financial advisor to Helen of Troy on the acquisition which was financed by JPMorgan Chase Bank, N.A. and Bank of America, N.A. of  Bank of America Corp. ( BAC ). Additionally, Helen of Troy entered into a Fourth Amendment to its Credit Agreement with Bank of America on Jun 11 to boost the unsecured revolving commitment of the Credit Agreement from $375 million to $570 million. Not required here..as the acquisition has been completed.


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This article appears in: Investing , Business , Stocks

Referenced Stocks: HELE , JPM , PG , BAC

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