Newell Brands Inc. (NWL) said it has signed a definitive agreement to sell its Winter Sports businesses to private equity firm Kohlberg & Company LLC as part of its strategy to simplify its portfolio.
The Hoboken, N.J.-based company expects gross proceeds of $240 million from the deal, which is expected to close early in the third quarter. The Winter Sports businesses includes brands like K2, Dalbello, Madshus, Line, and Atlas, among others. Net sales from the businesses were about $330 million in 2016, with annual adjusted EBITDA of $25 million.
Goldman Sachs is the financial advisor to Newell Brands on the transaction. In a separate transaction, Newell signed a definitive agreement to sell its Zoot and Squadra apparel brands for an undisclosed amount.
Newell is proving a bright spot in the retail sector, where the apparel industry in particular has been suffering significant sales declines as more consumers are spending discretionary income on travel and restaurants. NWL shares are up 18.7 year to date, and up 11.1 percent the past year. (See also: Consumer Products Stocks Jump on Q1 Results.)
Aside from divesting brands, Newell is also making strides in improving cash flow by reducing its debt. In the first quarter, the company paid down more than $725 million, to bring its total current debt to $2.8 billion.
Newell on May 8 reported first-quarter earnings of 34 cents per share that beat the Street view of 29 cents per share. Revenue was $3.27 billion, up from $1.31 billion the year prior and above analyst estimates.
“We have had a good start to 2017 and are on our way to unlock the transformative value creation associated with our long term guidance,” CEO Michael Polk said in a statement.