Rayovac 2004 Annual Report Download - page 71

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RAYOVAC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts)
(1) Description of Business
Rayovac Corporation and its subsidiaries (the “Company”) manufacture and market consumer batteries and
electric personal care products. Consumer batteries include general (alkaline, rechargeables, heavy duty, lantern
and general purpose), button cell and lithium batteries. The Company also markets a variety of battery powered
lighting devices such as flashlights and lanterns and designs and markets electric shavers and accessories, electric
grooming products and hair care appliances.
On May 28, 2004, the Company completed the acquisition of 90.1% of the outstanding capital stock,
including all voting stock, of Microlite S.A. (“Microlite”), a Brazilian battery company, from VARTA AG of
Germany and Tabriza Brasil Empreendimentos Ltda. (“Tabriza”) of Brazil. The total cash paid was
approximately $30,000, including approximately $21,100 in purchase price, approximately $7,000 of contingent
consideration, and approximately $1,900 of acquisition related expenditures, plus approximately $8,000 of
assumed debt. The contingent consideration will be earned by Tabriza upon Microlite’s attainment of certain
earnings targets through June 30, 2005. Upon the calculation of the total contingent consideration due to Tabriza,
if any, Tabriza will transfer Microlite’s remaining outstanding capital stock to the Company. Microlite operates
two battery-manufacturing facilities in Recife, Brazil and has several sales and distribution centers located
throughout Brazil. Microlite manufactures and sells both alkaline and zinc carbon batteries as well as battery-
operated lighting products. Microlite has operated as an independent company since 1982. The acquisition of
Microlite consolidates the Company’s rights to the Rayovac brand in Latin America. (See also Acquisitions, Note
16, for additional information on the Microlite acquisition).
On March 31, 2004, the Company completed the acquisition of an 85 percent equity interest in Ningbo
Baowang Battery Company, Ltd. (“Ningbo”) of Ninghai, China for approximately $17,000 in cash, including
approximately $600 of acquisition related expenditures, plus approximately $14,000 of assumed debt. The
remaining 15 percent equity interest will continue to be held by Ningbo Baowang Investment Company and the
founder/general manager of Ningbo. Ningbo, founded in 1995, produces alkaline and zinc carbon batteries for
retail, OEM and private label customers within China. Ningbo also exports its batteries to customers in North and
South America, Europe and Asia. (See also Acquisitions, Note 16, for additional information on the Ningbo
acquisition).
On September 30, 2003, the Company acquired all of the equity interests of Remington Products Company,
L.L.C. (“Remington”) for approximately $174,000, including acquisition related expenditures, and the
assumption of Remington’s outstanding debt of approximately $180,400. Remington is now a wholly owned
subsidiary of the Company. Remington is a leading designer and marketer of electric shavers and accessories,
electric grooming products and hair care appliances. (See also Acquisitions, Note 16, for additional information
on the Remington acquisition).
On October 1, 2002, the Company acquired substantially all of the consumer battery business (“VARTA”)
of VARTA AG for approximately $275,300, including acquisition related expenditures. The acquisition
consisted of the purchase of all of VARTA AG’s consumer battery subsidiaries and business outside of Germany,
excluding Brazil, and a controlling ownership and management interest in a new joint venture entity that will
operate the VARTA AG consumer battery business in Germany. The residual interest in the joint venture is held
by VARTA AG. (See also Acquisitions, Note 16, for additional information on the VARTA acquisition).
The Company’s products are sold on a global basis in over 120 countries in North America, Latin America,
Europe, and Asia/Pacific through a variety of trade channels, including retailers, wholesalers and distributors,
hearing aid professionals, industrial distributors and original equipment manufacturers (“OEMs”).
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