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NACCO Industries, Inc. and Applica Incorporated announced that NACCO will spin off its Hamilton Beach/Proctor-Silex business and Applica will merge with and into Hamilton Beach/Proctor-Silex.
The combined company will be named Hamilton Beach, Inc., and will be headquartered in Richmond, Virginia, U.S.
The proposed transaction is expected to create the largest U.S. public company focused on the small electric household appliance industry. The company is estimated to have annual sales of approximately U.S. $1.1 billion and a broad portfolio, including Black & Decker(R), Hamilton Beach(R), Proctor Silex(R), Windmere(R), and TrueAir(R).
Hamilton Beach, Inc. plans to design, market and distribute a wide range of products under these brand names, including coffee makers, irons, blenders, toaster ovens, indoor grills, food processors, air purifiers, and personal care appliances
Additionally, the merger is expected to create a company with a strengthened international presence through the combination of complementary positions in Mexico, Latin America and Canada. The transaction is scheduled to be complete by the end of the third quarter.
Dr. Michael J. Morecroft, Hamilton Beach/Proctor-Silex's current president and CEO, will lead Hamilton Beach, Inc. as president and CEO following the merger and will be supported by Hamilton Beach/Proctor-Silex's strong core management team, reinforced by Applica personnel. Dr. Morecroft has more than 30 years of experience in the U.S. and European small electric household appliance industry.
Alfred M. Rankin, Jr., Chairman, president and CEO of NACCO, will become the non-executive chairman of Hamilton Beach, Inc.'s board of directors.
Harry D. Schulman, Applica's chairman, president and CEO, said, "In addition to performance improvement programs, we believe that enhanced scale is critical to succeed in today's environment. The proposed merger will enable us to become part of a larger organization with a greater breadth of products, a strengthened international presence and an expanded retailer network. We are confident that this transaction will enable us to continue to utilize our knowledge and abilities to deliver exceptional benefits to customers, while offering stockholders the opportunity to participate in substantial value creation through Hamilton Beach, Inc."
According to Morecroft, the new company is expected to achieve pre-tax annual run-rate cost synergies of approximately U.S. $40 million to $50 million, as well as improved working capital efficiency of up to approximately $40 million, by the end of 2008.
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