Tom Lee merges past, present portfolio cos

In a $1.2bn deal, Thomas H. Lee will exchange its 83 percent ownership of lawn-and-garden products supplier United Industries for a 25 percent stake in publicly traded pet products supply company Rayovac, a former portfolio company of the Boston buyout gi

Boston buyout firm Thomas H. Lee Partners has agreed to merge its garden products platform company United Industries with pet supply corporation Rayovac in a deal valued at $1.6 billion (€1.2 billion).

Rayovac, based in Atlanta, will issue 13.75 million shares in the merger and pay the owners of United Industries $70 million in cash. Thomas H. Lee Equity Fund IV is an 83 percent owner of United Industries. Rayovac will assume roughly $880 million in the company’s debt.

Thomas H. Lee bought United, based in St. Louis, Missouri, in 1999 in a $620 million recapitalisation. The company makes insecticides, fertilisers and other lawn and garden products. In March, United purchased Nu-Gro Corporation of Canada for $144 million.

In fact, Thomas H. Lee is a previous investor in Rayovac. The buyout firm bought an interest in the company in 1996 and held that stake until 2002. David Jones, the chairman and chief executive officer of Rayovac, sat on the board of directors of united from 1999 until 2003, according to SEC documents. A consulting contract between himself and United ended in September. Thomas Shepherd, a member of Rayovac’s board of directors, is an investor in Thomas H. Lee Equity Fund IV. The press release noted that an independent committee not including Jones and Shepherd approved the recent merger.