Rayovac Expands in Pet Business

[ladmin]

PHILADELPHIA (Reuters) - Rayovac Corp. (ROV.N), which is diversifying beyond
its battery business, on Tuesday agreed to buy fish and reptile supplies company
Tetra Holding GmbH from a private equity group for about $550 million, sending
its shares soaring more than 9 percent.
The acquisition, which amounts to 415 million euros, comes on the heels of
Rayovac's $536 million purchase of lawn, garden and pet products company United
Industries Corp. Rayovac had said after that deal that it would look to buy more
assets in the pet products industry.
"The acquisition of Tetra is a significant step forward in our strategy of
becoming a more significant global player in the pet supplies industry," said
David Jones, Rayovac's chairman and chief executive officer.
Tetra, based in Melle, Germany, was a highly sought-after acquisition
target that makes food, aquarium products and accessories. It holds leading
market positions in Germany, the United States, Japan and Great Britain. Tetra
has about 700 employees and annual sales of about $266 million (200 million
euros).
"The deal sounds expensive but we think this is a good acquisition for the
company," Banc of America Securities analyst Joseph Norton said in a research
note. "Rayovac is moving quickly into the pet care market and this acquisition
strengthens the company's market position."
Shares of Rayovac soared 9.46 percent, or $3.89, to a new high of $45 in
morning trading after the deal was announced.
Rayovac said the deal should add slightly to earnings in the first year and
expects it to close by June 30.
SunTrust Robinson Humphrey analyst William Chappel, Jr. said that because
Rayovac will use most of its $600 million of credit to finance the deal, it was
unlikely the active acquirer "will have the flexibility for other near-term
deals."
Shares of Central Garden & Pet Co. (CENT.O), which some investors had
speculated would buy Tetra, dipped slightly to $44, down 0.56 percent.
The principal shareholders selling Tetra are European private equity firm
Triton, AXA Private Equity and Tetra management.

[Rottnbelle]

This is almost as odd as the Kraft alliance with big tobacco. Hard to understand the connection. But I guess someone got a "charge out of it". Couldn't help myself.