Rayovac owner reaches deal to sell; what’s next for Dixon plant?

DIXON – An agreement has been reached for Spectrum Brands Holdings to sell its batteries and appliance division to Energizer Holdings, and local Rayovac employees are left wondering how the deal will affect their jobs.

The sale, announced Jan. 16, would combine two of the big three global battery businesses, giving them the ability to better compete with Duracell, the market leader.

The Dixon Rayovac facility at 200 E. Corporate Drive is a packaging and distribution center. Operating since 2003, it has 150 full-time nonunion employees who ship about 11 million cases of batteries annually.

Spectrum Brands, based in Middleton, Wisconsin, has agreed to sell the division for $2 billion, but the sale still needs regulatory approval. The companies expect the deal to close sometime before the end of the calendar year.

Energizer, in announcing the agreement, said operational efficiencies from the combined operations could save between $80 million and $100 million in the first 3 years.

“The acquisition of Spectrum Batteries represents a compelling strategic, operational and financial fit for Energizer,” CEO Alan Hoskins said in a news release. “The top-line and free cash flow growth from this acquisition, combined with the opportunity to realize meaningful synergies, will further enhance our ability to drive long-term shareholder value.”

The company hasn’t provided details on where those synergies exist or which part of the combined operations could be impacted by consolidation.

Spectrum Brands doesn’t own its building in Dixon.

“The facility was built for us in 2003, and we have a long-term lease that doesn’t expire for many years,” said Dave Prichard, a corporate spokesman at Spectrum Brands.

While city and county officials said it’s too soon to know the implications of the deal on the local workforce, they are trying to be cooperative.

“We’re in the process of reaching out to Energizer and welcoming them to Dixon, while still being respectful that there is a deal in progress,” Mayor Li Arellano said.

Rayovac batteries are a legacy business for Spectrum – dating back to 1906, when it was known in Madison as The French Battery Company.

“It’s difficult to part with the battery business, and the folks at the Dixon facility do a great job,” Prichard said.

Like Energizer, however, the sellers are publicly traded and look to the deal as a vehicle for creating more value for its shareholders.

“While we have a long and proud heritage in the battery business, this is a key part of our re-allocation of capital strategy toward a faster-growing and higher-margin Spectrum Brands,” David Maura, executive chairman of Spectrum Brands said in the news release.

Spectrum Brands has three other divisions – Pet, Home and Garden; Hardware and Home Improvement; and Global Auto Care. It includes brands such as Armor All, Black and Decker and Iams pet foods.

Most of the product handled by Dixon, primarily AA and AAA batteries, come from a Rayovac manufacturing plant in Fennimore, Wisconsin. The plant produces about 1 billion batteries a year with nearly 300 employees.

Another Rayovac plant in Portage, Wisconsin, is the world’s leading producer of hearing aid batteries.

About 80 percent of the employees in Fennimore and Portage are union workers.