Newell Rubbermaid has entered into a definitive agreement to acquire Elmer’s Products, Inc. from an affiliate of Berwind Corporation, a family-owned investment management company, for a purchase price of $600 million, subject to customary working capital adjustments. Elmer’s, whose brands include Elmer’s®, Krazy Glue, and X-Acto, is the leading provider of activity-based adhesive and cutting products that inspire creativity in the classroom, at home, in the office, in the workshop and at the craft table. Elmer’s distributes Krazy Glue, a leading instant adhesive brand in North America, through a joint venture with Toagosei Chemical Co. Ltd.¹

“The acquisition of Elmer’s strengthens our market-leading Writing Segment with three outstanding arts and craft brands that will not only enhance our merchandising scale in the key Back to School drive period, but offer great cross-selling and distribution synergies given the strong overlap with Newell’s retailer and channel footprint,” said Michael Polk, President and Chief Executive Officer of Newell Rubbermaid. “We are delighted to welcome the Elmer’s team and their leading brands to our company. The addition of Elmer’s adds even more firepower and long term potential to our building growth acceleration and margin development story.”

Elmer’s net sales for calendar year 2015 are projected to be approximately $240 million. The acquisition is expected to be accretive to normalized earnings and operating margin in 2016. The acquired business will be reported as part of Newell Rubbermaid’s Writing segment with Elmer’s, X-Acto and Krazy Glue joining the company's Paper Mate, Sharpie, Expo and Mr. Sketch brands. The company will leverage its brand building, design and innovation capabilities to accelerate Elmer’s growth while simultaneously delivering synergies in distribution, cross-selling and merchandising. The acquisition is expected to be financed through a combination of available liquidity and debt financings. The company anticipates the transaction closing by year end, subject to customary conditions and regulatory approvals.

Coincident with the agreement to acquire Elmer’s, the company has initiated a process to divest its Levolor® and Kirsch window coverings brands. The Décor business is expected to generate approximately $310 million in net sales in 2015. The business will continue to be reported as part of the Home Solutions Segment and will be managed as a stand-alone business through this process.

The company expects no material impact to 2015 full year results related to either the Elmer’s acquisition or the planned Décor divestiture given the timing of both transactions. Accordingly, 2015 full year guidance remains unchanged at 4 to 5 percent core sales growth and normalized EPS of $2.14 to $2.20 per share. As recently communicated in connection with second quarter earnings, the company continues to track towards the mid-point of both full year ranges. In 2016, Newell Rubbermaid expects the normalized EPS accretion from the acquisition of Elmer’s to be effectively offset by the dilution associated with the disposal of Décor, resulting in minimal impact to 2016 normalized EPS. The company plans to provide 2016 full year guidance along with its third quarter financial results later this month.

¹ “Krazy Glue” is a registered trademark of Toagosei Co. Ltd., used with permission.

Reconciliation of Core Sales Guidance for Year Ending December 31, 2015

Reconciliation of Normalized EPS Guidance for Year Ending December 31, 2015