Armored AutoGroup Eyes Next Steps After IDQ Buy

NEW YORK (The Deal) -- Armored AutoGroup, the Danbury, Conn.-based maker of automotive cleaners and fuel additives, is considering a number of options, including an initial public offering or sale, according to its chief executive.

CEO Michael Klein said, after a company presentation at the Jefferies' consumer and retail conference in Nantucket, Mass., Thursday, that Armored is moving forward with the integration of IDQ Holdings Inc., which makes vehicle air-conditioning do-it-yourself recharge products, that it acquired about three months ago for undisclosed terms.

With IDQ adding another $10 million a year in additional Ebitda through synergies-in total, $137 million over the past 12 months for the combined companies-Klein said Armored's options are many. He added that adjusted Ebitda was $122 million for the combined companies.

Most of the synergies are being realized between the two companies because Armored and IDQ had relationships with different groups of retailers and can cross-sell their products. Armored also has a large international presence, which will be key to increasing IDQ product sales as it had minimal presence outside of the U.S.

Klein said the company had been receiving financial advice from investment bank Jefferies LLC, while its PE sponsor Avista Capital Partners LP had used J.P. Morgan & Co. as its financial adviser.

Armored was acquired from Clorox by Avista in 2010 for $780 million.

PE firm Kinderhook Partners LP, which owned IDQ, also continues to hold a substantial stake in Armored AutoGroup following the merger, Klein noted.

Klein said it was a bit early for an IPO, even though it is an option. A sale to consumer conglomerates like Jarden (JAH) or a Church & Dwight (CHD), would be attractive as well, and could happen quickly depending on the offer, he agreed. Klein added the caveat that the company is under no pressure to sell.

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