• Underwear merger announced
Hanes said it will acquire Maidenform for approximately $547.6 million, adding to its underwear garment business.
Hanes will pay $23.50 per share for Maidenform, roughly a 23% premium over the closing price of $19.09 on Tuesday, ahead of the announcement.
Hanes CEO Richard Noll said in the business is a natural fit, no pun intended.
Maidenform CEO Maurice Reznik said that the deal was appealing in part because it provides the necessary infrastructure and resources to help grow its business.
Last year 57% of Maidenform's revenue came from bra sales and about 35% of revenue was comprised from foundation shapewear sales.
The deal will also allow Maidenform to take advantage of in-house manufacturing, owned by Hanes.
Within three years Hanes expects the buyout will add $500 million in annual sales, or roughly 60 cents per share in earnings.
The deal is expected to close before the end of this year, but Maidenform shareholders still have to approve the buyout.
• Cereal and soda weigh down profits
PepsiCo said this week its Quaker Oats business and North American beverage divisions faced challenges in the recent quarter.
CEO Indra Nooyi, addressed the weaknesses during the company’s earnings call.
Nooyi said. “The beverage category in the U.S. has its challenges, especially around carbonated soft drinks.”
She said calories and ingredients such as artificial sweeteners are the key issues that concern consumers.
A different set of problems faced the Quaker North America segment, where operating profit dropped 14% during the quarter.
“A good deal of this business lives in the center of the store and the center of the plate, and that makes it a challenge to grow, especially as consumers increasingly seek convenience,” Nooyi said.
PepsiCo Inc. reported earnings per share of $1.28 for the second quarter, an increase of 36% from a year ago. Revenue grew 2.11% to $16.807 million in the quarter.
• Neilsen tracks new product winners
Hershey, Del Monte, Nestle, Kraft and Colgate-Palmolive were among the companies launching the most successful consumer products in the last two years.
Neilsen’s “Breakthrough Innovation Report for 2013” tracked more than 3,400 new product launches in 2011 through two years on the shelves and released the following results.
Hershey’s release of Reese’s Minis help raise revenue by roughly $235 million in the two year period. The “mini” candy segment is growing in popularity as it removed the individual wrappers and give consumers an easier way to indulge on the go.
‘Milo's Kitchen Home-Style Dog Treats” a product from Del Monte, raked in roughly $180 million in revenue during its first two years on the market.
Nestle launched “Skinny Cow Candy” it’s own brand of lower calorie chocolates that brought in $120 million in added sales over the two-year period.
Kraft Foods had winners in its “Milo Liquid Water Enhancer” which brought in $270 million in revenue and its “Velveeta Cheesy Skillets” garnered $175 million in revenue and forced General Mills, maker of Hamburger Helper to push out new products to keep pace.
Colgate-Palmolive launched “Colgate Optic White” toothpaste which brought in $255 million in revenue in the two-year period, according to Neilsen.