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Newell (NWL) Closes Jarden Merger, Creates Newell Brands

Newell Rubbermaid Inc. NWL effectively concluded its previously announced merger with Jarden Corp. JAH, thereby creating a $16 billion entity called Newell Brands Inc., which will continue to trade on the New York Stock Exchange as ‘NWL’.

News of Newell and Jarden’s merger announcement made its first rounds in Dec 2015, per which the deal would be a combination of cash and stock. The merger, which trailed shareholders’ approval of both companies, has created an entity with a solid brand portfolio, bringing together their diverse operations.

The combined firm includes brands like Mr. Coffee machines, Rawlings baseballs, PaperMate pens, Rubbermaid containers, Graco baby strollers and others, under the same roof. This combination is expected to be a complementary fit, as it will help both companies expand their operations further.

While Newell’s market cap is larger than that of Jarden’s, the latter’s revenue generation has been robust on the back of its solid acquisitions so far. As quoted by Bloomberg, Jarden expects sales to surge 16% year over year to more than $10 billion in 2016, while Newell projects sales of nearly $6.1 billion for the same time period.

In fact, both Newell and Jarden have been gaining momentum, backed by their numerous acquisitions. Expanding as a leading provider of niche consumer products used in home food preservation, Jarden’s focus on acquisitions is evident from its latest buyouts of Waddington food containers and Jostens class rings and yearbooks.  

As for Newell, this Zacks Rank #2 (Buy) company has always been keen on strengthening its portfolio by investing in key segments, reducing activities with marginal profitability, and exiting certain businesses and markets. This is evident from Newell’s acquisition of Elmer’s Products, Ignite Holdings LLC and bubba brands inc.

Further, to curtail its non-performing assets and simplify its portfolio structure, the Sharpie producer sold its medical cart business to Caspa Solutions, its Endicia online postage business to Stamps.com, and is on track to sell its Levolor and Kirsch window coverings brands. Also, it plans to remove the Calphalon retail outlet stores and kitchen electrics businesses.

We believe that these constant endeavors will help the companies sharpen their focus on creating a faster growing, higher margin and more profitable combined entity.

Other Stocks to Consider

Other stocks worth considering in the same industry include Blue Buffalo Pet Products, Inc. BUFF and Tupperware Brands Corporation TUP, each carrying a Zacks Rank #2.

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NEWELL RUBBERMD (NWL): Free Stock Analysis Report
 
TUPPERWARE BRND (TUP): Free Stock Analysis Report
 
BLUE BUFFALO (BUFF): Free Stock Analysis Report
 
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