Jacuzzi Brands Corp. Receives Equity Investment and Completes Financial Recapitalization

Jan 22, 2010, 16:00 ET from Jacuzzi Brands Corp.

CHINO HILLS, Calif., Jan. 22 /PRNewswire/ -- Jacuzzi Brands Corp. (the "Company") today announced the closing of an equity investment and a recapitalization transaction that raises new cash for operations and results in a significant reduction in outstanding indebtedness.  The transaction was supported by 100% of its second lien debt holders, shareholders and management team, which collectively invested $56 million of new capital into the Company or its parent.

As a result of the transaction, Jacuzzi has significantly increased liquidity and a stronger balance sheet, allowing it to capitalize on opportunities emerging from the recovery of the housing industry and the overall economy.  This improvement also will benefit the Company's first lien debt holders, asset-based loan facility holders, vendors, and suppliers, who will remain unimpaired through the transaction.  

The transaction has eliminated all of the Company's approximately $175 million of second lien debt and will reduce annual cash interest expense by approximately $10 million.  In addition, certain second lien holders, along with the Company's current shareholders and the management team, invested approximately $23 million for new equity interests in the parent entity of the Company.  Finally, the Company refinanced an existing overseas revolver with a new $35 million term loan at an indirect overseas subsidiary of the Company, leaving the Company with an attractive maturity profile with no significant debt coming due before its 2014 fiscal year.  In aggregate, the transaction has increased the Company's net liquidity by $28 million.

Affiliates of Apollo Global Management, LLC (together with its subsidiaries, "Apollo") and Ares Management, LLC were investors in the transaction and are significant shareholders of Jacuzzi post closing.  

Thomas Koos, President and CEO of Jacuzzi, stated: "The willingness of our second lien holders and shareholders to reduce indebtedness and make significant new investments in our company recognizes its strong position for the future and the opportunity to grow our Jacuzzi brand globally.  The capital infusion gives us the liquidity we need to take advantage of expansion opportunities as the worldwide economy begins to recover.  This demonstration of confidence in the solid fundamentals of our business is due in no small part to our employees, customers and our dealers, whom I wish to thank again for their continued dedication to our business."

Lazard Freres LLC served as the Company's financial advisor.  O'Melveny & Myers acted as legal counsel to the Company.  Chanin Capital Partners served as financial advisor, and Latham & Watkins LLP acted as legal counsel, to the lead second lien holders.

About Jacuzzi Brands Corp.

Jacuzzi Brands Corp., through its subsidiaries, is a global manufacturer and distributor of high quality and innovative branded bath, plumbing and backyard products for the residential, commercial and institutional markets. Our product offerings include whirlpool baths, outdoor hot tubs, showers, sanitary ware, bath tubs, as well as fixtures and accessories. Our products are marketed under our portfolio of brand names, including the flagship JACUZZI® brand as well as, SUNDANCE®, and ASTRACAST®.

For more information about Jacuzzi, visit www.jacuzzi.com or call 1-800-288-4002.

About Apollo

Apollo is a leading global alternative asset manager with offices in New York, Los Angeles, London, Frankfurt, Luxembourg, Singapore and Mumbai.  Apollo had assets under management of over $51 billion as of September 30, 2009, in private equity, credit-oriented capital markets and real estate invested across a core group of nine industries where Apollo has considerable knowledge and resources.

About Ares Management LLC

Ares Management is an SEC-registered investment adviser and a leading alternative asset manager with total committed capital under management of approximately $33 billion as of December 31, 2009.  With complementary pools of capital in private equity, private debt and capital markets, Ares invests across all levels of a company's capital structure.  Ares is headquartered in Los Angeles with approximately 250 employees across the United States and Europe.

Forward-Looking Statements:

This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

Forward-looking statements are based on our currently available financial, economic and competitive data and on business plans.  Actual results could vary materially depending on risks and uncertainties that may affect the Company's operations, markets, services, prices and other factors. These risks and uncertainties include, but are not limited to, economic, competitive, legal, governmental and technological factors.  There is no assurance that the Company's expectations will be realized.

Forward-looking statements speak only as of the date made. The Company undertakes no obligation to update any forward-looking statements, including prior forward-looking statements, to reflect the events or circumstances arising after the date as of which they were made. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, us.

SOURCE Jacuzzi Brands Corp.