Deal's Off – Applica/HamBeach Merger Canceled
Oct 20, 2006
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Applica pulled the plug on its planned merger with NACCO Industries, Inc.'s electric housewares business, Hamilton Beach/Proctor-Silex.

Instead, Applica Incorporated (Miramar, Florida, U.S.) announced a definitive agreement with affiliates of Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund, L.P. Harbinger Capital Partners already owns approximately 40 percent of Applica, making it the largest shareholder in the company, and will acquire all outstanding shares for $6 per share in cash.

The agreement comes after a determination by Applica’s board that the Harbinger Capital Partners offer is superior to the terms the merger agreement it made in July of this year with NACCO and HB-PS Holding Company, Inc., a NACCO subsidiary. Applica terminated that merger agreement in accordance with the terms of the agreement.

"We are pleased to reach agreement with Harbinger Capital Partners on a transaction that allows our shareholders to realize immediate liquidity and a substantial premium for their shares," said Harry D. Schulman, Applica’s chairman, president and CEO. “We believe that Applica will have a very bright future under Harbinger’s ownership.”

“Applica is an outstanding growth platform in the small appliance industry with a world-class brand portfolio, led by Black & Decker®," said Philip A. Falcone, senior managing director for Harbinger Capital Partners. "Through this transaction, Applica will become a well-capitalized company, positioned to pursue a wide range of important initiatives on a global basis that we believe will enable us to grow the business, introduce innovative new products, and lower costs. We look forward to completing the transaction in a timely manner, and taking an active role in further strengthening the business for the benefit of consumers, retailers and Applica’s other business partners.”

The transaction is not subject to any financing condition, the companies said. Completion of the transaction, expected in the first quarter of 2007, is subject to approval by Applica’s shareholders and to regulatory approvals and other customary closing conditions.

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