Prestige announces an agreement to expand its eye care offer

  • Acquisition Adds TheraTears Brand to Company’s Primary Eye Care Portfolio
  • The acquisition is expected to add approximately $ 60 million and $ 20 million in revenue and EBITDA, respectively on an annual basis
  • The transaction is expected to close in the second quarter of the fiscal year

TARRYTOWN, NY, May 27, 2021 (GLOBE NEWSWIRE) – Prestige Consumer Healthcare Inc. (“Prestige” or the “Company”) (NYSE: PBH) today announced that it has entered into a definitive agreement to acquire a portfolio of more than -the over-the-counter consumer brands of specialty pharmaceutical company Akorn Operating Company LLC (“Akorn”) for $ 230 million in cash. The deal is structured as an asset purchase that offers anticipated tax benefits of around $ 30 million and expected annual EBITDA of around $ 20 million, which equates to a transaction valued at less than 10 times the deal. ‘Proforma EBITDA. The transaction is expected to add annual revenue, earnings per share and operating cash flow of approximately $ 60 million, $ 0.10 and $ 13 million, respectively.

The consumer product portfolio to be acquired from Akorn includes the eye care brand TheraTears, which accounts for approximately 80% of the portfolio’s revenue, as well as four other brands in the VMS and Cough & Cold categories. TheraTears is a doctor-created brand with a heritage dating back to the mid-1970s, when ophthalmologist Dr. Jeffrey Gilbard began researching the treatment and relief of dry eye disease. The brand has a strong and loyal user base for its products and participates in the rapidly growing OTC “dry eyes” segment.

“Prestige has a long and successful history in the eye care field highlighted by the iconic Clear Eyes brand. The acquisition of the proven TheraTears brand will further strengthen this leading eye care franchise with additional long-term growth opportunities in the rapidly growing dry eye segment, ”said Ron Lombardi, President and CEO of Prestige Consumer Healthcare.

The TheraTears brand is well positioned with mild and episodic dry eye consumers with a long history of market share gains and revenue growth above the category. In addition, the portfolio complements Prestige’s operating model with outsourced manufacturing and distribution characteristics similar to the Company’s existing activities. Brands should be able to take advantage of existing infrastructure, which will lead to rapid integration. Akorn’s portfolio has a strong financial profile of growing sales and margins consistent with Prestige’s long-term growth objectives and financial profile.

“Today’s acquisition announcement reinforces our strategy that acquisitions will continue to be part of a disciplined capital allocation approach, alongside debt reduction and continued investment in our portfolio. of leading brands. Acquisition fits our criteria which focuses on long-term brand development opportunities, fits our business model and delivers disciplined returns. We anticipate that this proven strategy of acquiring, integrating and branding to grow our portfolio will continue to create long-term shareholder value, ”concluded Mr. Lombardi.

The Company plans to fund the acquisition with a combination of funds from its existing credit facilities and available liquidity and expects the transaction to add approximately half a point to its leverage calculation upon closing. . Prestige expects the FY22 year-end pro forma leverage level to be less than the leverage ratio defined by the FY21 year-end commitment of 4.2x. At closing, the transaction is expected to have a positive impact on earnings per share and cash flow from operations, excluding the elements of the transaction, integration and purchase accounting. The transaction is expected to close in the second fiscal quarter, subject to customary closing conditions, including authorization under the Hart-Scott Rodino Antitrust Improvements Act of 1976.

Sawaya Partners, LLC is acting as exclusive financial advisor to Prestige in the transaction and Reed Smith LLP as legal advisor.

Non-GAAP financial measures
Today’s press release also presents the expected impact on EBITDA. EBITDA is a non-GAAP financial term and represents earnings before interest, taxes, depreciation and amortization. Management believes that the presentation of EBITDA provides additional information useful to investors on the trends and financial profitability of Akorn Consumer Health.

About Prestige Consumer Healthcare

Prestige Consumer Healthcare markets, sells, manufactures and distributes consumer health products to retail outlets in the United States and Canada, Australia and certain other international markets. The Company’s diverse portfolio of brands includes Monistat® and the summer eve® women’s health products, BC® and Goody’s® pain relievers, clear eyes® eye care products, DenTek® specialized oral hygiene products, Dramamine® motion sickness treatments, fleet® glycerin enemas and suppositories, Chloraseptic® and that of Luden® sore throat treatments and drops, compound W® warts treatments, small remedies® over-the-counter pediatric products, Butt Paste by Boudreaux® diaper rash ointments, Nix® lice treatment, Debrox® earwax remover, Gaviscon® antacid in Canada, and Hydralyte® rehydration products and buttocks® range of nasal and sinus care products in Australia. Visit the Company’s website at www.prestigeconsumerhealthcare.com.

Forward-looking statements

This press release contains “forward-looking statements” within the meaning of federal securities laws that are intended to qualify for the safe harbor of liability established by the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” may generally be identified by the use of forward-looking terms such as “will”, “will”, “expect”, “anticipate”, “opportunities”, “positioned” or “continue” (or negative or other derivatives of each of these terms) or similar terminology. “Forward-looking statements” include, without limitation, statements regarding the impact of the acquisition on the Company’s revenues, cash flow, EBITDA, EPS and leverage, benefits acquisition tax, the Company’s ability to execute its capital allocation strategy, reduce debt and invest in brand building, the Company’s ability to create long-term value for its shareholders, when of closure, the ability of acquired brands to achieve market share gains and revenue growth, and the Company’s ability to leverage infrastructure for acquired brands, timely integrate acquired brands and achieve synergies costs. These statements are based on management’s estimates and assumptions regarding future events and financial performance and are believed to be reasonable, although they are inherently uncertain and difficult to predict. Actual results could differ materially from those expected due to various factors, including the impact of the COVID-19 pandemic and business and economic conditions, consumer trends, the impact of the Company’s advertising and promotional initiatives and new product development, customer inventory management initiatives, exchange rate fluctuations, competitive pressures and the ability of the Company’s third-party manufacturers, logistics providers and suppliers to meet demand for its products and to reduce costs. A discussion of other factors that could cause results to vary is included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2020 and other periodic reports filed with the Securities and Exchange Commission. .

Investor Relations Contact
Phil Terpolilli, CFA, 914-524-6819
[email protected]

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