Reckitt Benckiser to Buy SSL

 
Reckitt Benckiser Plc agreed to buy Durex condom maker SSL International Plc for 2.54 billion pounds ($3.9 billion), bolstering its health and personal-care business in the biggest acquisition since the company was formed in 1999.
Reckitt’s offer is worth 1,171 pence a share, 33 percent more than SSL’s closing price yesterday. SSL rose 33 percent in London trading, the most ever. Reckitt, the maker of Cillit Bang cleaners and Nurofen painkillers, gained 3.5 percent.
Buying SSL meets Chief Executive Officer Bart Becht’s aim of expanding in health and personal care as growth slows in Reckitt’s larger household cleaners unit. The takeover will help compensate for a slump of as much as 80 percent in U.S. sales of the Suboxone heroin-dependency drug, Reckitt’s fastest-growing product, when generic versions of the product enter the market.
“It’s a very good fit and they will be able to do a lot with the brands,” said Julian Hardwick, an analyst at RBS. “When you take all that into account, the multiples they are paying are reasonable,” he said. Hardwick has a “buy” rating.
Reckitt is paying about 18 times SSL’s earnings before interest, taxes, depreciation and amortization, according to Bloomberg data. The maker of Veet hair remover paid almost 30 times Ebitda for the $2.3 billion purchase of Adams Respiratory Therapeutics Inc. in 2008, its last major acquisition.

Reckitt Benckiser Plc agreed to buy Durex condom maker SSL International Plc for 2.54 billion pounds ($3.9 billion), bolstering its health and personal-care business in the biggest acquisition since the company was formed in 1999.
Reckitt’s offer is worth 1,171 pence a share, 33 percent more than SSL’s closing price yesterday. SSL rose 33 percent in London trading, the most ever. Reckitt, the maker of Cillit Bang cleaners and Nurofen painkillers, gained 3.5 percent.
Buying SSL meets Chief Executive Officer Bart Becht’s aim of expanding in health and personal care as growth slows in Reckitt’s larger household cleaners unit. The takeover will help compensate for a slump of as much as 80 percent in U.S. sales of the Suboxone heroin-dependency drug, Reckitt’s fastest-growing product, when generic versions of the product enter the market.
“It’s a very good fit and they will be able to do a lot with the brands,” said Julian Hardwick, an analyst at RBS. “When you take all that into account, the multiples they are paying are reasonable,” he said. Hardwick has a “buy” rating.
Reckitt is paying about 18 times SSL’s earnings before interest, taxes, depreciation and amortization, according to Bloomberg data. The maker of Veet hair remover paid almost 30 times Ebitda for the $2.3 billion purchase of Adams Respiratory Therapeutics Inc. in 2008, its last major acquisition.

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