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Zep Subsidiary, Amrep, to Acquire Certain Assets from Waterbury Companies for $66M
• Creates Leadership Position in the Institutional and Industrial Air Care Market
• Supports Key Strategic Growth Initiatives with Distributors and Retailers
• Acquisition Further Leverages the Strength of Amrep's Operating Platform
• Waterbury Expected to be Accretive to Zep's Earnings in Fiscal 2011
ATLANTA -- Zep Inc. (NYSE:ZEP), a leading producer, marketer, and service provider of a wide range of cleaning and maintenance solutions, today announced that Amrep, Inc., a wholly-owned subsidiary of Zep Inc., along with certain other subsidiaries, has signed a definitive agreement to acquire certain brands and assets, and assume certain liabilities of the North American operations of Waterbury Companies, Inc. - a leading provider of air care delivery systems and products for facility maintenance - for a cash purchase price of approximately $66 million, subject to post-closing working capital adjustments. The assets acquired through this transaction, which is expected to close during the first fiscal quarter of 2011, generated approximately $40 million in revenues during the last twelve months at margins that are attractive to Zep Inc. This acquisition provides additional avenues for growth into the distributor and retail channels. The acquisition is expected to generate a number of synergistic opportunities and is expected to strengthen Amrep's leadership position in air care delivery systems and products for the facility maintenance markets.
"Building on the success of the Amrep acquisition, this transaction represents another important step in our strategy to expand our access to market through distributors and specialty retailers," commented John K. Morgan, Chairman, President and Chief Executive Officer of Zep Inc. "Waterbury has strong brands and impressive customer relationships that, when combined with Amrep under the leadership of Joe Seladi, should accelerate our growth in these key end-markets. The integration of Waterbury into Amrep's operating platform is expected to be accretive to Zep Inc.'s fiscal 2011 earnings. Further, this deal represents meaningful synergies that, once achieved, should add significant value to the overall organization," concluded Mr. Morgan.
"We are excited to offer our customers expanded product offerings in the air care, water conservation and insect control categories. Our distributor partners will benefit from this combination, as they will be able to source multiple product options through their relationship with Amrep. We believe this will allow Amrep to help make our customers' business better by streamlining their supply chain in these important product categories," commented Joe Seladi, President of Amrep, Inc.
Amrep will add Waterbury's well-established TimeMist®, TimeWick, MicrobemaxTM and Touch Less ControlTM brands to its existing brand portfolio, which currently includesMisty®, Next Dimension®, I-Chem®, and other Amrep proprietary brands. This acquisition provides Amrep with not only enhanced product capabilities, but also access to new specialty Farm and Agricultural retail channels through the Country Vet® branded products designed for insect and odor control.
The closing of the transaction is subject to expiration of the applicable waiting period pursuant to the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. BB&T Capital Markets served as the exclusive financial advisor to Zep Inc. in the transaction. Hunton & Williams, LLP served as the legal advisor to Zep Inc. in the transaction.
About Zep Inc.
Zep Inc. is a leading producer, marketer, and service provider of a wide range of cleaning and maintenance solutions for commercial, industrial, institutional, and consumer end-markets. Zep Inc.'s product portfolio includes anti-bacterial and industrial hand care products, cleaners, degreasers, deodorizers, disinfectants, floor finishes, sanitizers, and pest and weed control products, as well as high performance products and professional grade chemical products for the automotive, fleet maintenance, industrial/MRO supply, institutional supply and motorcycle markets through Amrep, Inc. The Company markets these products and services under well recognized and established brand names, such as Zep®, Zep Commercial®, Zep ProfessionalTM, Enforcer®, National Chemical®, SeligTM, Misty®, Next Dimension®, Petro®, i-Chem® and a number of private labeled brands, some of which have been in existence for more than 100 years. Zep Inc.'s headquarters are in Atlanta, Georgia. Visit the company's website at www.zepinc.com.