Prestige Brands Holdings signs agreement for acquisition of Hydralyte

Prestige Brands Holdings, Inc. (NYSE-PBH) today announced the signing of a purchase agreement for the acquisition of Hydralyte™ in Australia and New Zealand from The Hydration Pharmaceuticals Trust of Victoria, Australia. The acquisition is expected to close, subject to customary closing conditions, during the first quarter of fiscal 2015, which began on April 1, 2014.

The acquisition is projected to double the annual revenues of Care Pharmaceuticals, Prestige's subsidiary in Australia, to approximately $50 million (AUD) for fiscal 2015, and is expected to be accretive to Prestige's earnings per share for fiscal 2015, exclusive of transaction, integration and purchase accounting items. Prestige acquired Care Pharmaceuticals in July 2013.

Hydralyte is the leading over-the-counter (OTC) brand in oral rehydration in Australia and New Zealand, and will be marketed and sold through Care Pharmaceuticals. Hydralyte is available in pharmacies in multiple forms and is indicated for oral rehydration following diarrhea, vomiting, fever, heat and other ailments.

Financial terms of the acquisition have not been disclosed. Prestige funded this acquisition, its fifth in the past five years, with a combination of cash on the balance sheet and its existing credit facility with very minimal impact on the Company's leverage ratio or M&A capacity.

Commentary

In making the announcement, Prestige CEO Matthew M. Mannelly commented, "We are very pleased with the acquisition of Hydralyte in the Australia and New Zealand markets. Hydralyte is a strong, strategic addition to our portfolio. It is a high growth, market-leading OTC brand with a name synonymous with oral rehydration among both consumers and healthcare professionals. Hydralyte strengthens and complements our portfolio, is expected to double the revenues of our Australian subsidiary and is another step closer to our stated goal to grow our business in the Austral-Asia region to $100 million."

"Hydralyte is well-positioned to benefit from both Care and Prestige's core competencies in brand building and innovation. Care's strong management team under the leadership of Malcolm Yesner has a long track record of successful brand building and driving sales growth by focusing on consumer needs, innovation and new products," he said. "In the nine months since its acquisition, Care has already successfully integrated Prestige's Murine® eye care brands into its portfolio, and is now well-positioned to integrate the Hydralyte acquisition. We look forward to continuing to build and expand our strong portfolio in the fast-growing Austral-Asia region," Mr. Mannelly said.

Sawaya Segalas, & Co., LLC acted as exclusive financial advisor to Prestige Brands on this transaction.