Harbinger Group and Harbinger Capital Partners have reached a definitive agreement for the transfer of Harbinger Capital Partners’ majority interest in consumer products company Spectrum Brands to Harbinger Group.
Harbinger Group is a publicly-traded holding company majority-owned by Harbinger Capital Partners.
Harbinger Capital Partners views Harbinger Group as an efficient, long-term capital market vehicle for exercising its majority ownership over Spectrum Brands to build significant stockholder value.
Following the transfer of majority ownership, Spectrum Brands will remain a standalone publicly-traded company, and the transaction will have no impact on its credit profile or financial position.
Philip Falcone, chief executive of Harbinger Capital Partners and Harbinger Group, says: "Spectrum Brands is a core long-term investment. It has a great consumer brand portfolio and is strongly positioned to build shareholder value through free cash flow generation, growth in earnings and Ebitda and significant debt reduction."
David Lumley, chief executive of Spectrum Brands, says: "Our long-term strategic partnership with Harbinger Capital Partners has been key to building Spectrum Brands into a successful global consumer company. Today, our business is financially strong and positioned for growth, with a widely trusted portfolio of brands that provide quality and value for consumers. We believe that placing Harbinger Capital Partners’ ownership interest into a permanent capital structure such as Harbinger Group underscores Harbinger Capital Partners’ commitment and confidence in our company."
Pursuant to the definitive agreement, Harbinger Capital Partners will contribute 27,756,905 shares of common stock of Spectrum Brands to Harbinger Group in exchange for 119,909,830 newly-issued shares of Harbinger Group common stock.
Upon closing of the transaction, which is expected to occur in the fourth quarter of 2010, Harbinger Group anticipates it will hold 54.4 per cent of the outstanding Spectrum Brands common stock, Harbinger Capital Partners will continue to hold 12.7 per cent of the outstanding Spectrum Brands common stock and Harbinger Capital Partners will hold approximately 93.3 per cent of the outstanding Harbinger Group common stock.
