Salton acquires Applica parent company; new board, CEO put in place

By Lisa Kerner

Charlotte, N.C., Dec. 28 - Salton, Inc. completed its acquisition of APN Holding Co., Inc., the parent of Applica Inc., to create one of the largest U.S. public companies focused on the small household appliance and pet supply products industries.

Salton shareholders approved the merger at a special meeting on Dec. 28.

APN's sole stockholders Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund, LP became the controlling stockholders of Salton, with a 92% stake in the company.

As previously reported, under the merger agreement, all outstanding shares of Salton's series A voting convertible preferred stock and series C non-voting preferred stock will be converted into shares of Salton's common stock, and Harbinger Capital will exchange $90 million of Salton's second-lien notes and $15 million of Salton's senior subordinated notes due 2008 for shares of a new series of 16% non-voting preferred stock of Salton.

Each member of Salton's board of directors resigned at the merger's close. Harbinger Capital Partners' designees, Lawrence M. Clark Jr., Eugene I. Davis, Jeffrey T. Kirshner and David M. Maura, were elected in their place.

The new Salton board elected Terry L. Polistina to become chief executive officer and Ivan R. Habibe as vice president and chief financial officer of Salton.

Polistina was Applica's chief operating officer, and Habibe had been Applica's chief accounting officer.

"The new Salton will remain committed to delivering quality, innovative products across the Black & Decker, George Foreman, Russell Hobbs, Litter Maid, Toastmaster and Farberware brands," Polistina said in a company news release.

"In addition, our relationship with Harbinger will provide an opportunity to seek synergistic acquisitions to create value for shareholders, while bolstering the combined company's geographical reach and product offerings."

Salton was advised by Houlihan Lokey Howard & Zukin and Sonnenschein Nath & Rosenthal LLP. Harbinger and APN were advised by Lazard Freres & Co., LLC and Paul, Weiss, Rifkind, Wharton & Garrison LLP.

It was previously reported that APN terminated a prior agreement with Salton under which a Salton subsidiary was to merge with and into APN after the companies failed to close the deal by the July 31 deadline.

Lake Forest, Ill.-based Salton markets and distributes branded small appliances, home decor and personal care products.

Applica, located in Miramar, Fla., along with its subsidiaries, markets branded and private-label small household appliances.

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