Prestige Brands Holdings signs agreement to acquire Insight Pharmaceuticals for $750 million

Prestige Brands Holdings, Inc.("Prestige" or the "Company") (NYSE:PBH) today announced that it has entered into a definitive agreement to acquire Insight Pharmaceuticals Corporation ("Insight"), a marketer and distributor of feminine care and other over-the-counter ("OTC") healthcare products, for $750 million in cash. As part of the transaction, Prestige will acquire tax attributes with a present value of approximately $100 million, which results in an effective purchase price of approximately $650 million. This transaction, combined with the Hydralyte® transaction announced on April 15, 2014, is expected to result in pro forma revenues and adjusted EBITDA of approximately $800 million and $300 million, respectively for the Company in fiscal 2015.

The transaction will extend Prestige's portfolio of iconic OTC brands to include Insight's leading feminine care platform anchored by Monistat®, the #1 brand in OTC yeast infection treatment. Insight's portfolio also includes EPT® home pregnancy test products and other feminine care brands. The acquisition will give Prestige a leading platform in feminine care in the U.S. and Canada, while also adding other OTC brands to its cough/cold, pain relief, eye and ear, and dermatological platforms.

The acquisition of Insight is consistent with Prestige's disciplined M&A criteria and well-established brand building strategy. Insight's key brand potential, high gross margin and attractive cash flow characteristics will further enhance Prestige's already industry-leading financial profile. The transaction is expected to be immediately accretive to the Company's earnings per share and free cash flow per share, exclusive of transaction, integration and purchase accounting items.

The Company anticipates closing on this transaction during the first half of this fiscal year, subject to customary closing conditions, including clearance under the Hart-Scott Rodino Antitrust Improvements Act of 1976. Financing for the transaction is expected from a combination of cash on the balance sheet, use of Prestige's revolving credit agreement, and an add-on to its existing term loan.

Commentary

According to Matthew M. Mannelly, CEO of Prestige Brands, "The acquisition of Insight Pharmaceuticals will add the attractive new feminine care platform to the Prestige portfolio. The platform is anchored by Monistat, the #1 brand in its category and the brand recommended most by doctors. Monistat will become the Company's largest and its first $100 million brand."

"The acquisition is expected to boost Prestige's annual revenues to approximately $800 million, bringing us closer to our stated goal of becoming a billion dollar OTC products company," he said. "We expect that our already industry-leading free cash flow and EBITDA margins will further strengthen as a result of the acquisition of Insight. Our excellent financial profile and strong free cash flow will enable us to rapidly de-lever, consistent with our prior acquisitions."

"In the last five years, our proven management team has led a dramatic transformation of our company into a diversified OTC healthcare products company with a portfolio of iconic brands," Mr. Mannelly continued. "The acquisition of Insight is our largest transaction yet, and is in the 'sweet spot' of our demonstrated core competency of acquiring, integrating and growing businesses through investment in brand support and innovation. We anticipate a smooth integration of the Insight brands in the U.S. and Canada, as well as the Hydralyte brand in Australia and New Zealand, into our portfolio as we continue to build shareholder value for the long term," he said.

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

Insight Pharmaceuticals is a portfolio holding of Swander Pace Capital and its co-investment partner, Ontario Teachers' Pension Plan.