Newell Rubbermaid Inc.
) recently announced the closure of its Hardware business sale to
Nova Capital - an expert buyer of corporate and private equity
portfolios - for $214 million, including accounts receivable. The
deal was declared on Aug 9, 2013.
The after-tax proceeds are likely to be around $175 million. The
hardware business comprises four brands, namely Amerock, Ashland,
Bulldog and Shur-Line, which together are expected to generate
revenues of approximately $255 million for 2013.
In May 2013, Newell Rubbermaid had declared that it was looking
for prospective buyers to offload its Hardware and Teach Platform
businesses. According to the company, these businesses were not
in line with its 'Growth Game Plan' strategy as announced in Oct
2012. Under the particular strategy, the company intends to lay
off approximately 10% of the workforce, build a new
organizational model as well as leadership team.
In Jul 2013, Newell Rubbermaid vended its Teach Platform business
to a Beverly Hills, Calif. based private equity firm, Skyview
Capital, LLC. Newell's Teach Platform business includes the Mimio
and Headsprout interactive teaching technology brands. The terms
of the deal were not disclosed.
We believe that the recently concluded transaction will enable
Newell Rubbermaid to build an organized portfolio in the existing
five fundamental business segments, namely Home Solutions,
Writing, Tools, Commercial Products and Baby & Parenting.
Consequently, it will provide the company the upside to grow
through innovation, brand augmentation and by availing
opportunities in emerging economies.
We believe that the overall growth plan will help Newell
Rubbermaid to reduce the complexities of the organization, boost
customer services and sourcing functions as well as increase
investments in the core business areas. The long-term growth
plan, which is expected to be fully implemented by the end of
second-quarter fiscal 2015, will save approximately $180-$225
Newell Rubbermaid currently carries a Zacks Rank #3 (Hold). Some
other stocks in the retail sector that are worth a look include
Citi Trends, Inc.
). All of these carry a Zacks Rank #1 (Strong Buy).
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