Cleaning & Restoration Breaking News

WD-40 Completes Heartland Corp. Acquisition

June 3, 2002
/ Print / Reprints /
ShareMore
/ Text Size+
SAN DIEGO--(BUSINESS WIRE)--June 3, 2002--WD-40 Company announced today the completion of the purchase of Heartland Corporation.

"As we announced earlier, this acquisition is a perfect fit for our platform and we are excited with the growth opportunities of this brand in the U.S. and internationally," said Garry O. Ridge, president and CEO of WD-40 Co.

The purchase price of $47 million was funded through a combination of cash, stock and debt. The debt is comprised of a $20 million three-year term loan at a fixed interest rate of 6.29% from Prudential Capital Group, an institutional investment division of Prudential Financial. Another portion of the proceeds was provided by working capital and funds from a revolving credit facility with Union Bank of California. The stock portion was valued at $12 million.

As previously announced, the company expects the acquisition to be accretive by one or two cents in fiscal 2002 and between 15 and 20 cents in fiscal 2003.

"We expect the major elements of the acquisition to be fully integrated by July 1, 2002," Ridge said. " Both companies have similar outsourced manufacturing and multi-trade channel distribution models and these synergies will help us achieve full integration by the end of fiscal 2002."

Sales of the Heartland brands in the past twelve months were about $34 million with a gross margin slightly higher than the current WD-40 Company overall gross margin. Revenues are generated primarily by the Spot Shot brand and a smaller percentage of sales are generated by several general cleaning, carpet and upholstery brands. "Although the majority of the sales are within the U.S., the Spot Shot brand has good distribution in Canada," said Ridge. The company plans to divest Heartland's small cleaning & upholstery brand portfolio.

The company plans to close the Heartland operations near Kansas City by the end of fiscal year 2002. Manufacturing of the Spot Shot brand will continue through its current outsourced manufacturing facility in St. Louis. "WD-40 company continues to have an excellent track record using an outsourcing-manufacturing model," said Ridge, "and we plan to continue using that model as we merge the Spot Shot brand into its supply chain."

In the first full year, total SG&A expenses are expected to increase about $4.5 million mainly due to the added costs of product distribution and the addition of 9 new positions in San Diego. These positions are in sales and marketing, information technology, customer service, finance and administration.

Did you enjoy this article? Click here to subscribe to i Cleaning Specialist Magazine.

You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

The 2014 Experience Conference and Exhibition

A look in photos at the 2014 Experience Conference and Exhibition, which was held from April 24-26 at the Embassy Suites Convention Center and Spa in Frisco, Texas.

1/27/15 2:00 pm EST

Grow Your Business and Improve Operations with New Payment Technology

Attend this free webinar to learn how new developments in payment technology can help you close more jobs, increase upselling opportunities and improve operations.

Podcasts

The winter slow season is a great time to pursue commercial cleaning accounts and stay busy. John "the Hitman" Braun solicited questions from thousands of cleaners across the country regarding their questions on commercial cleaning accounts and answers them in this episode of the show.
More Podcasts

ICS Cleaning Specialist Magazine

CoverImage

2014 Nov/Dec

The Nov/Dec ICS features content on how to get better meter readings, a roundtable on truckmount development, neighborhood marketing and more. Also included is the annual Buyer’s Guide and Directory.

Table Of Contents Subscribe

Janitorial Work

In addition to residential and commercial carpet cleaning, do you do any janitorial work on the side?
View Results Poll Archive

THE ICS STORE

FinalCover.gif
The Carpet Cleaner's Book of Unlimited Success! (ebook)

Don’t worry about the recession or about your competition.  Now you can be the owner of over 400 ways for carpet cleaning professionals to make more money and get more jobs!

More Products

ICS DIRECTORY AND BUYING GUIDE

Director_Buyer.jpgThe premier resource and reference guide for the cleaning and restoration industries.

Click here to view

STAY CONNECTED

facebook_40.png twitter_40px.png youtube_40px.pngcrc logo

TRUCKMOUNT EQUIPMENT AND ACCESSORIES GUIDE

Truckmount.jpgEquipment listings and specifications from the leading industry manufacturers.

Click here to view