Reckitt Benckiser completes tender offer for Schiff Nutrition
Completion of $1.4 billion offer will result in Schiff Nutrition becoming an indirect wholly owned subsidiary of Reckitt Benckiser under a "short-form" merger with Ascot Acquisition
Register for free to listen to this article
Listen with Speechify
0:00
5:00
SLOUGH, England—Reckitt Benckiser Group PLC has announcedthe completion of the tender offer made by its indirect wholly owned subsidiaryAscot Acquisition Corp. for all outstanding shares of common stock of SchiffNutrition International, Inc. The deal was priced at $42 per share, for anapproximate total of $1.4 billion, and as of the offer's expiration on Dec. 14,a total of 28,745,180 shares were tendered to the offer and not withdrawn,representing roughly 96.266 percent of all outstanding share of SchiffNutrition common stock and 90.137 percent of all outstanding shares of commonstock on a fully diluted basis. In addition, 397,714 shares were deliveredpursuant to guaranteed delivery procedures. As a result, Ascot Acquisition willeffect a "short-form" merger, under which Schiff Nutrition will become anindirect wholly owned subsidiary of Reckitt Benckiser.
Reckitt Benckiser announced its plans for the tender offeron Nov. 16, and officially commenced the offer on Nov. 21, with a setexpiration date of Dec. 14. The deal came just over two weeks after BayerHealthCare LLC announced on Oct. 30 that it has signed a merger agreement withSchiff Nutrition. Bayer's agreement had a deal value of $34 per share in cash,for an approximate total of $1.2 billion, with Reckitt Benckiser's offerrepresenting a 23.5-percent premium
"We are very pleased to have reached a mutually beneficialagreement with Schiff and are excited to enter the $30 billion global vitamins,minerals and supplements market with such a strong portfolio of high qualitybranded business in the USA," Rakesh Kapoor, CEO of Reckitt Benckiser, said ina press release regarding the signing of the merger agreement. "Schiff'sportfolio is an excellent fit with our strategic focus on health and hygiene,where in health care in the USA we already have Mucinex, Delsym, Cepacol andDurex as major brands."
Schiff Nutrition
has a product portfoliothat includes brands such as Airborne, MegaRed, Move Free, Sustenex, DigestiveAdvantage and Tiger's Milk, with a presence in the cardiovascular health, jointcare and immune support health supplement markets.
The nutritional supplement company has a staffof roughly 400 employees, with headquarters and a manufacturing site in SaltLake City and additional offices in Emeryville, Calif. Reckitt Benckiserexpects significant synergies to result from the transaction, which is expectedto be immediately accretive to earnings on an adjusted basis.
"Thesub-categories within which Schiff operates have strong growth momentum and tothis we expect to combine Reckitt Benckiser's strong go to market capabilitiesas well as proven skills in branding, innovation and consumer communication andeducation," said Kapoor. "The integration process will be undertaken promptly followingcompletion of the transaction, so that the business can continue its growthtrajectory with minimum disruption and realize synergies as soon as possible.Reckitt Benckiser expects the tender offer to close before the end of calendaryear 2012."
The tender offer remains subject to customary closingconditions, including the tender of a majority in voting power of SchiffNutrition shares of common stock and the expiration or early termination of theHart-Scott-Rodino Antitrust Improvements Act waiting period.
Morgan Stanley & Co. Limited acted as ReckittBenckiser's exclusive financial advisor for the transaction, and Paul, Weiss,Rifkind, Wharton & Garrison LLP was brought on as the company's legalcounsel.
