Global private equity firm Vestar Capital Partners today acquired Unilever's North American laundry business for $1.08 billion in cash.
Brands such as Snuggle, Wisk, Surf and Sunlight will now be marketed and handled under a new company, The Sun Products Corp., which was formed when Vestar Capital Partners merged its business entity, Huish Detergents, with the newly acquired brands. Based in Salt Lake City, Huish Detergents is the largest manufacturer of private label detergents and fabric softeners in the U.S. Vestar bought the company in March 2007.
As part of the deal, London-based Unilever will retain "preferred shares in The Sun Products Corp. with a face value of $375 million, and warrants offering the opportunity to acquire up to 2.5% of the common equity of [Sun Products]," per the company's press release. Unilever also will sell its manufacturing facility in Baltimore.
Unilever Group chief executive Patrick Cescau said the move allows the company to focus on expanding leading brands outside of North America, while getting rid of "nonstrategic brands" with high turnover. In 2007, Unilever's North American, Canadian and Puerto Rican laundry business resulted in $1 billion in turnover for the company.
"We have reached a good deal for both Unilever shareholders and the business," Cescau said in a written statement. "It puts our North American laundry people and brands into a company which is focused on the laundry category, and which, with its new combined portfolio, is well-positioned to become a strong player in the market."
Carol Makovich, a rep for Vestar and Huish Detergents, said the firm has yet to determine marketing and branding strategies for the new family of brands.
"We have just announced the transaction and it's really way too soon to discuss that kind of detail," Makovich said. She added that the company would begin finalizing such initiatives after the deal closes later this year.