Edgewell Personal Care Co. in Shelton, Connecticut, and Harry’s Inc. in New York, have entered into a definitive agreement under which the two companies will combine in a cash and stock transaction that values Harry’s at $1.37 billion.
Harry’s was founded in 2013 as a direct-to-consumer purveyor of shaving and grooming products at a fair price; it has since expanded to include the Flamingo line for women from Harry’s Lab, the company’s innovation branch.
Edgewell is a consumer products company with a diversified portfolio of brands, such as Schick and Wilkinson Sword men’s and women’s shaving systems and disposable razors; Edge and Skintimate shave preparations; Playtex, Stayfree, Carefree and o.b. feminine care products; Banana Boat and Hawaiian Tropic sun care products; Playtex infant feeding; Diaper Genie; Bulldog and Jack Black male skin care and grooming products; and Wet Ones moist wipes.
The combined company will be led by Edgewell President and CEO Rod Little. In addition to Andy Katz-Mayfield and Jeff Raider, Harry’s co-founders and co-CEOs who will serve as co-presidents of U.S. operations, Colin Hutchison will continue to serve as COO and will lead the combined company’s international division. Additionally, Dan Sullivan will serve as CFO, Marisa Iasenza will serve as the chief legal officer and John Hill will serve as the chief human resources officer.
“The combination of Edgewell and Harry’s is a pivotal step forward in further transforming our organization and strengthening our competitive position and ability to drive sustained growth and value creation,” said Little. “Building on Edgewell’s and Harry’s complementary strengths, our combined company will have leading brands and omni-channel capabilities that are essential to meet the needs of the modern consumer and win in today’s market environment. We welcome Harry’s entrepreneurial employees and look forward to working closely with Andy and Jeff, whose ingenuity and demonstrated success will enable us to take our U.S. business to the next level. We are excited about our future and the opportunities we have to deliver superior long-term shareholder returns as a next-generation CPG platform.”
Katz-Mayfield and Raider said, “When we launched Harry’s six years ago, our vision was to create a grooming brand that better met our needs as consumers, and over time, a CPG platform that creates brands people love across more categories. Together with Edgewell, we see a significant opportunity to continue delivering on that vision, leveraging Edgewell’s advanced technology and global footprint alongside our customer-first approach, brand building expertise and omni-channel capabilities. We’re incredibly proud of the brands we’ve created and the team we’ve built and have tremendous respect for Edgewell and its established brand portfolio. We look forward to what we can accomplish together.”
Under the terms of the agreement, approximately 79 percent of the total value of the transaction will be paid in cash and 21 percent will be paid in Edgewell common stock. Upon completion of the transaction, Harry’s shareholders will own approximately 11 percent of Edgewell.
The transaction has been approved by both companies’ boards of directors and is expected to close by the end of the first quarter of calendar 2020, subject to the satisfaction of customary closing conditions and receipt of regulatory clearance.
Edgewell intends to finance the transaction through a combination of cash on its balance sheet, net new debt and equity. Bank of America Merrill Lynch has provided committed financing in connection with the transaction.
Upon completion of the transaction, the combined company’s board of directors will be expanded to add a new director selected by representatives of Harry’s.