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Newell Strengthens Portfolio, Agrees to Brand Sale (revised)
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It seems consumer goods behemoth,Newell Brands Inc. (NWL - Free Report) is still not done with its growth plans. The company in a bid to further its progress on simplifying and strengthening its portfolio, recently entered into a deal to sell the Rubbermaid consumer storage totes business and also put up a couple of more businesses for sale. Additionally, it completed the recently agreed acquisition of Smith Mountain Industries.
The company has agreed to sell its Rubbermaid consumer storage totes business, which accounts for nearly $70 million of annual sales, to United Solutions for an undisclosed amount. United Solutions is a leader in the supply of plastic products for home and office. As part of the sale agreement, the companies agreed upon a five-year licensing agreement regarding the use of the Rubbermaid brand name.
Further, the company also declared its interest in finding buyers for its Pine Mountain and Diamond brands. The businesses to be offloaded include the Pine Mountain fire starters, fire logs, and fire safety business, along with Diamond matches, fire starters, lighters, toothpicks, and laundry business. These businesses jointly account for about $87 million of the company’s annual sale. Along with these assets, it plans to dispose the related private label products and other associated brands as well.
However, Newell stated that its remaining Diamond brand products including plastic cutlery, as well as its First Alert home safety business, will not be included in the sale.
Not only this, the company is also on the lookout for buyers for numerous other businesses, such as two of its winter sports units, Völkl and K2, and its Heaters, Humidifiers, and Fans business. It targets to complete all the aforementioned divestitures including that of Pine Mountain and Diamond businesses in the first half of 2017.
Additionally, the company had agreed upon the sale of Tools business to Stanley Black & Decker Inc. (SWK - Free Report) for $1.95 billion in Oct 2016. This deal, which is expected to conclude in the first half of 2017, will include the company’s Irwin, Lenox and Hilmor brands.
Concurrently, as mentioned above, Newell successfully bought Smith Mountain Industries, which mainly operates through its WoodWick Candle brand, for roughly $100 million. Smith Mountain’s WoodWick Candle is another fast growing brand in its own category, with annual sales of around $65 million. The buyout of this unique scented candles brand is likely to be an appropriate fit for Newell’s Home Fragrance space, which is one of its Win Bigger categories. The acquisition also perfectly complements Newell’s Yankee Candle brand that forms a part of the Jarden’s portfolio.
The company anticipates the acquisition to be immediately accretive to Newell Brands’ normalized earnings.
Clearly, the aforementioned divestitures and acquisitions indicate a tremendous progress on the company’s new growth game plan that not only reflect Newell’s focus on simplifying its operating structure, but also highlight its commitment toward making prudent investments in areas with higher growth potential. The plan targets transforming Newell from a holding company to an operating company with fresh investment plans and new ideas for its combined portfolio with Jarden.
Given this progress, the company’s shares have grown 26.6% in the past one year, outperforming the Zacks categorized Consumer Products – Miscellaneous Staples industry’s growth of just 2.6%.
Zacks Rank & Key Picks
Newell currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader consumer staples sector include Ollie's Bargain Outlet Holdings Inc. (OLLI - Free Report) and B&G Foods Inc. (BGS - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ollie's Bargain has to its credit a spectacular earnings trend as the company delivered a positive earnings surprise in the past four quarters. Moreover, its long-term EPS growth rate of 20.6% helps it stand strong against the industry.
B&G Foods, with a long-term EPS growth rate of 8% has seen positive estimate revisions in the past 60 days. The company also flaunts a solid earnings surprise history.
(We are reissuing this article to correct a mistake. The original article, issued yesterday, January 16, 2017, should no longer be relied upon.)
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Newell Strengthens Portfolio, Agrees to Brand Sale (revised)
It seems consumer goods behemoth,Newell Brands Inc. (NWL - Free Report) is still not done with its growth plans. The company in a bid to further its progress on simplifying and strengthening its portfolio, recently entered into a deal to sell the Rubbermaid consumer storage totes business and also put up a couple of more businesses for sale. Additionally, it completed the recently agreed acquisition of Smith Mountain Industries.
The company has agreed to sell its Rubbermaid consumer storage totes business, which accounts for nearly $70 million of annual sales, to United Solutions for an undisclosed amount. United Solutions is a leader in the supply of plastic products for home and office. As part of the sale agreement, the companies agreed upon a five-year licensing agreement regarding the use of the Rubbermaid brand name.
Further, the company also declared its interest in finding buyers for its Pine Mountain and Diamond brands. The businesses to be offloaded include the Pine Mountain fire starters, fire logs, and fire safety business, along with Diamond matches, fire starters, lighters, toothpicks, and laundry business. These businesses jointly account for about $87 million of the company’s annual sale. Along with these assets, it plans to dispose the related private label products and other associated brands as well.
However, Newell stated that its remaining Diamond brand products including plastic cutlery, as well as its First Alert home safety business, will not be included in the sale.
Not only this, the company is also on the lookout for buyers for numerous other businesses, such as two of its winter sports units, Völkl and K2, and its Heaters, Humidifiers, and Fans business. It targets to complete all the aforementioned divestitures including that of Pine Mountain and Diamond businesses in the first half of 2017.
Additionally, the company had agreed upon the sale of Tools business to Stanley Black & Decker Inc. (SWK - Free Report) for $1.95 billion in Oct 2016. This deal, which is expected to conclude in the first half of 2017, will include the company’s Irwin, Lenox and Hilmor brands.
Concurrently, as mentioned above, Newell successfully bought Smith Mountain Industries, which mainly operates through its WoodWick Candle brand, for roughly $100 million. Smith Mountain’s WoodWick Candle is another fast growing brand in its own category, with annual sales of around $65 million. The buyout of this unique scented candles brand is likely to be an appropriate fit for Newell’s Home Fragrance space, which is one of its Win Bigger categories. The acquisition also perfectly complements Newell’s Yankee Candle brand that forms a part of the Jarden’s portfolio.
The company anticipates the acquisition to be immediately accretive to Newell Brands’ normalized earnings.
Clearly, the aforementioned divestitures and acquisitions indicate a tremendous progress on the company’s new growth game plan that not only reflect Newell’s focus on simplifying its operating structure, but also highlight its commitment toward making prudent investments in areas with higher growth potential. The plan targets transforming Newell from a holding company to an operating company with fresh investment plans and new ideas for its combined portfolio with Jarden.
Given this progress, the company’s shares have grown 26.6% in the past one year, outperforming the Zacks categorized Consumer Products – Miscellaneous Staples industry’s growth of just 2.6%.
Zacks Rank & Key Picks
Newell currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader consumer staples sector include Ollie's Bargain Outlet Holdings Inc. (OLLI - Free Report) and B&G Foods Inc. (BGS - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ollie's Bargain has to its credit a spectacular earnings trend as the company delivered a positive earnings surprise in the past four quarters. Moreover, its long-term EPS growth rate of 20.6% helps it stand strong against the industry.
B&G Foods, with a long-term EPS growth rate of 8% has seen positive estimate revisions in the past 60 days. The company also flaunts a solid earnings surprise history.
(We are reissuing this article to correct a mistake. The original article, issued yesterday, January 16, 2017, should no longer be relied upon.)
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>