De'Longhi, P&G Finalize License Agreement for Braun Electrics Line
TREVISO, Italy-The De'Longhi Group and Procter & Gamble have completed their agreement for the perpetual licensing of the Braun brand for small electrics.
The agreement, initially announced in April, calls for De'Longhi to produce a collection of small electrics, ironing and other products under the Braun label. Braun's line of personal-care products remains within P&G's brand portfolio. As previously stated, the agreement includes the acquisition by De'Longhi of connected patents, a few production lines and molds, about 100 employees who will relocate to Germany and the inventory connected with the relevant product categories.
Terms of the deal include the payment by De'Longhi of $62 million on Aug. 31, the day the agreement was finalized, plus the payment of $113 million along with accrued interests split in annual payments over the next 15 years. In addition, P&G will receive a variable portion connected to the sales performance of the products over the first five years of the deal, with a minimum value of $0 and a maximum value of $153.6 million.
De'Longhi is financing the deal partially through a funding program that includes two bank loans for a total of $100 million, and a U.S. private placement (the sale of securities to select investors) of about $88 million. The remaining part of the deal will be financed internally by De'Longhi.