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Prestige Brands Holdings, Inc. (PBH - Snapshot Report) recently made the largest acquisition in its history, buying 17 over-the-counter drug brands from GlaxoSmithKline for $660 million. This Zacks #1 Rank (Strong Buy) has a forward P/E of just 11.8.

Prestige Brands distributes over-the-counter healthcare, personal care and household products worldwide.

Many of the brands are well known and have been around for 70 years or more such as Spic and Span, Comet, Compound W wart treatment, Chloraseptic sore throat products, and Cutex nail polish remover.

Acquisition of GSK Brands

On Dec 20, the company announced it was acquiring 17 over-the-counter pharmaceutical brands from GSK for $660 million in cash. The deal is expected to close in the first half of 2012 and be accretive to earnings in fiscal 2013 which begins on Apr 1, 2012.

Some of the brands include the pain relievers BC, Goody's and Ecotrin, the gastrointestinal (GI) aids Tagamet and Fiber Choice and sleep aid Sominex. The company will have two new platforms with adult aspirin-based analgesics and GIs.

Prestige Brands had already been on an acquisition spree in 2011. It had bought 5 brands from Blacksmith Brands and the Dramamine brand from Johnson and Johnson.

Fiscal 2013 Zacks Consensus Estimate Rises

Analysts have been bullish about the GSK acquisition. But that won't be accretive until the next fiscal year.

That's where you can see the analyst optimism. The fiscal 2013 Zacks Consensus Estimate has moved higher since the announcement. 3 estimates have been revised up pushing the Zacks Consensus to $1.08 from $1.01.

That is earnings growth of 13.2% as the company is expected to make 95 cents per share in fiscal 2012.

The fiscal 2012 Zacks Consensus has been holding steady at 95 cents the last 3 months.

Prestige Brands is scheduled to report fiscal third quarter results on Feb 8.

Lots of Value

Shares sold off, like just about every stock, during the summer of 2011. It has since bounced on news of the acquisition.

Prestige Brands has attractive valuations here. In addition to a forward P/E under the 12.4 average for the S&P 500, it also has a price-to-book ratio of just 1.4. A P/B ratio under 3.0 usually indicates value.

Additionally, the company has a solid 1-year return on equity (ROE) of 11.8%.

Prestige Brands is a value stock with a growth component thanks to strategic additions of key consumer brands.

Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at traceyryniec.

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