Newell Brands has agreed to sell its Pure Fishing and Jostens businesses to private equity firms for a total of about $2.5 billion as the struggling consumer products company continues to execute its turnaround plan.
Under its “accelerated transformation” strategy, Newells is seeking to divest non-core businesses that account for about 35% percent of its net sales. The end product would be a company focused on seven core consumer divisions.
The divestitures announced Wednesday include Pure Fishing, which sells tackle, rods and reels under several brands such as Berkley and Abu Garcia. Newells will sell the business to Sycamore Partners, with gross proceeds expected to be $1.3 billion.
The company is also selling Jostens to Platinum Equity for gross proceeds of about $1.3 billion. Jostens sells yearbooks, publications, class rings and other products to the academic market.
Newells expects the transactions to contribute about $2.5 billion of after-tax proceeds, subject to customary working capital and other adjustments.
“We are pleased to announce another step forward in our Accelerated Transformation Plan, with the signing of the Pure Fishing and Jostens transactions,” CEO Michael Polk said in a news release. “We have full confidence that these businesses will continue to thrive under new ownership, as they leverage their strong positions in the market place.”
As The Wall Street Journal reports, Newell, whose brands include Rubbermaid, Graco and Mr. Coffee, “has repeatedly missed sales goals since it closed a $15 billion deal to buy Jarden Corp. in 2016. The much larger company was supposed to have enough clout to squeeze rivals, dominate store shelves and move quickly into online sales.”
The turnaround plan is expected to generate $10 billion in proceeds for Newell. Other recent sales have included sporting goods maker Rawlings, packaging manufacturer Waddington Group, and hair-products business Goody Products.
Newell last week reported quarterly net sales dropped 7.7% and that it swung to a loss after recording an $8.1 billion impairment charge on its operations.
Sycamore Partners and Platinum Equity are both major PE players, with about $10 billion and $13 billion in assets under management, respectively.