Consumer products company Helen of Troy Limited HELE is geared to bolster its presence in the health and wellness business through strategic acquisitions.
Closely following the takeover of Healthy Directions LLC and its subsidiaries in 2014, the company has now acquired the Vicks VapoSteam U.S. liquid inhalant business from consumer products giant The Procter & Gamble Co. PG. The VapoSteam business reported annual revenue of $10 million in 2014.
As part of the agreement, Helen of Troy has also acquired trademarks of Vicks VapoPad scent pads in the U.S. Vicks VapoSteam and Vicks VapoPads are used in Vicks humidifiers, vaporizers and health care devices.
The takeover is expected to be financed through Helen of Troy’s revolving credit facility.
Helen of Troy had taken over the Vicks business in Dec 2010 from Kaz Inc. Kaz used to market its products to leading retailers under a variety of brand names, including Vicks and Braun, under license from The Procter & Gamble. Helen of Troy already owned Vicks’ VapoPads business.
Thus,the addition of VapoSteam business bolsters Helen of Troy’s position in the U.S. humidifier and vaporizer market. The takeover brings both the devices and consumables business under one banner, which would surely boost its top-line and market share. The takeover is expected to further enhance the profitability of our Healthcare/Home Environment segment and also be accretive in fiscal year 2016 earnings.
We are encouraged by Helen of Troy’s foray into newer categories. Last year, the company entered the growing vitamins, minerals and supplements (VMS) category with the buyout of Healthy Directions, LLC and its subsidiaries. It also signed a licensing agreement with pioneer of healthy non-stick cookware — The Cookware Company. (Read: Helen of Troy Continues its Expansion in Health Biz)
Apart from P&G, the Zacks Rank #3 (Hold) company has entered into several strategic relationships with consumer product giants in the past like Unilever plc UL and Revlon, Inc. REV.
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