P&G to buy Recovery Engineering for $265 million
|Thursday, August 26, 1999 10:01 AM|
|NEW YORK, Aug 26 (Reuters)
- Consumer products giant Procter & Gamble Co. on Thur. said it would buy Recovery
Engineering Inc., a maker of household drinking water systems and filters, for $265
million in cash.
The purchase of Minneapolis-based Recovery Engineering, which sells
products under the PUR brand, will give Proctor & Gamble a foothold in the
growing market for water treatment.
Cincinnati-based Proctor & Gamble, the maker of Tide Laundry detergent and Crest toothpaste, said it would make a tender offer for all shares of Minneapolis-based Recovery Engineering shares at $35.25 a share -- double its share price -- in a deal approved by both boards.
Recovery Engineering shares closed at 17-5/8 Wednesday on the Nasdaq stock market and were halted from early trading, while Proctor & Gamble shares lost 15/16, to 101-11/16, in early New York Stock Exchange trading.
The tender offer will begin within five business days, and the deal is expected to close by early October this year.
The acquisition will reduce Proctor & Gamble's earnings in fiscal 2000 and 2001 by less than a penny each year, a Proctor & Gamble spokeswoman said, and add to earnings after that.
"Recovery Engineering is in the forefront of the fast-growing market for home water filtration systems," Proctor & Gamble President and Chief Executive Durk Jager said in a statement.
The water-treatment market has heated up recently, with French conglomerate Vivendi SA agreeing to buy U.S. Filter Corp. the No. 1 U.S. water-treatment company, for $6.2 billion in March. The No. 2 U.S. player, United Water Resources Inc., agreed in August to be sold for $1 billion to Suez Lyonnaise des Eaux , also of France.
The larger water-treatment companies such as US Filter and United Water include, besides consumer products, extensive operations in commercial and municipal contracting. Recovery Engineering, though, makes products exclusively for the consumer market.
Proctor & Gamble plans to retain a majority of Recovery Engineering's engineering
and management team, Proctor & Gamble spokeswoman Linda Ulrey said. She would not
comment on whether Recovery Engineering Chairman and CEO Brian Sullivan would take a
position at Proctor & Gamble.
|Quote for referenced ticker symbols: UWR, USF, REIN, PG|
CLICK HERE FOR ARTICLE ON EXPLOSIVE GROWTH OF HOUSEHOLD TAP FILTERS
CLICK HERE FOR ADDITIONAL ARTICLE ON RECOVERY ENGINEERING ACQUISITION