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Henkel to Buy Sun Products In $3.5 Billion Debut For New CEO

Henkel AG agreed to buy U.S. laundry and home-care company Sun Products Corp. from Vestar Capital Partners in a deal valued at about 3.2 billion euros ($3.5 billion), in the first acquisition under Chief Executive Officer Hans Van Bylen since he took over last month.

Sun, which had revenue last year of about $1.6 billion, sells laundry care brands including All, Sun and Snuggle fabric conditioner. The company, based in Wilton, Connecticut, employs about 2,000 people and has two production sites and one research and development facility in the U.S., Henkel said in a statement Friday.

Laundry and home care powered first-quarter earnings growth for Henkel. Van Bylen, who took the helm on May 1, inherited a full-year sales goal of 20 billion euros that his predecessor admitted may be too optimistic as emerging-market currency headwinds make the target difficult to reach without the help of acquisitions.

The purchase will give Henkel the No. 2 position in laundry care in North America, the company said. The region accounted for 20 percent of Henkel sales last year.

The Dusseldorf-based maker of adhesives and hair-care brands including Schwarzkopf shampoo last month stuck to its full-year forecast for organic sales to grow 2 percent to 4 percent and for an earnings before interest and tax margin to increase to about 16.5 percent.

Bankers from Perella Weinberg Partners and Credit Suisse advised Henkel, while Cleary Gottlieb Steen & Hamilton LLP served as legal adviser. The acquisition will be debt-financed and is underwritten by Deutsche Bank, JP Morgan and BNP Paribas.

Henkel shares have risen 1.8 percent this year to 105.05 euros, valuing the company at 42.9 billion euros.

News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.

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