Company adds OTC brands

In a deal to strengthen its position in the over-the-counter market for health-care products, Prestige Brands Holdings Inc. will acquire the Westchester-based owner of five leading consumer brands.

Officials at Prestige Brands headquarters in Irvington said the company recently agreed to pay $190 million for Blacksmith Brands Holdings Inc., a one-year-old Tarrytown-based portfolio company of Charlesbank Capital Partners L.L.C., a middle-market private equity investment firm with headquarters in Boston. Prestige will acquire working capital valued at $16 million with the stock purchase.

The transaction, expected to close in the fourth quarter this year, will add five brands to the Prestige over-the-counter portfolio: Efferdent, Effergrip, PediaCare, Luden”™s and NasalCrom. Currently five of the company’s six core brands are in the OTC segment, including Chloraseptic, Clear Eyes, Compound W, Little Remedies and The Doctor’s NightGuard.

The Irvington holding company also recently announced it has sold its Cutex line of nail polish removers to Arch Equity Partners, a newly formed investment group in St. Louis, at an undisclosed price. The sale of Cutex, the largest remaining product in the company”™s personal care segment, was effective Sept. 1.

Prestige Brands in the first quarter of its 2011 fiscal year that ended June 30 reported a 22 percent drop in revenues, to $2.2 million, for its personal-care segment compared to the same quarter in the 2010 fiscal year. The sales decline was traced to distribution losses for the Cutex brand.

The company a year ago sold its three shampoo brands ”“ Prell as well as Denorex and Zincon dandruff shampoos ”“ to Ultimark Products L.L.C. for $9 million. Those brands accounted for 2 percent to 3 percent of annual company sales.

The company also counts well-known household cleaning brands in its portfolio, including Comet, Spic and Span and Chore Boy.

With the addition of the five name brands acquired in the Blacksmith Brands deal, over-the-counter products in the Prestige portfolio will account for 75 percent of revenues, according to company officials. Prestige Brands CEO Matthew Mannelly said the transaction “is consistent with our strategy of acquiring businesses that have strong consumer franchises and are important to retailers.”

The acquisition is expected to increase Prestige”™s earnings per share in fiscal 2012 and to provide excellent long-term growth opportunities for both sales and earnings.

Trading in Prestige Brands stock on the New York Stock Exchange closed at $8.87 per share on Sept. 20, the day the acquisition was announced, up $1.05 per share from the previous trading day. Through Sept. 27, the company”™s 52-week trading high was $9.99 a share, with a 52-week low of $6.66 per share.