A Healthy Bottom Line
Invested Banker to the Consumer Industry
TARGET: Kaz, Incorporated
COUNTERPARTY: Helen of Troy Limited
SEGMENT: Health & Wellness
TRANSACTION VALUE: $260.0 million
CLOSING DATE: December 13, 2010
ROLE: Exclusive Financial Advisor

Kaz, Incorporated (“Kaz” or the “Company”) was founded in upstate New York in 1926 by Max Katzman, the inventor of the world’s first electric vaporizer. At the 1927 convention of the American Medical Association, Mr. Katzman’s invention of this safe and effective appliance for vapor inhalation therapy was credited with saving over a thousand lives a year. Vapor Therapy is prescribed today by virtually 100% of America’s physicians, particularly for croup and upper respiratory illness in infants and children. For 80 years and three generations, Kaz has been a family-owned and managed enterprise. Under the leadership of Richard Katzman, grandson of the founder, the Company completed the acquisition of Honeywell’s Consumer Products business in 2003 (advised by Sawaya Partners & Co., LLC). The Company’s portfolio of branded consumer durables includes premier names in home environment and health & wellness such as Vicks, Honeywell and enviracaire, among others. The Company’s relationship with The Procter & Gamble Company (“P&G”) dates to 1995 when Kaz secured a long-term license to market a vaporizer under the Vicks brand name. Since then, P&G has expanded the agreement to other product categories, including humidifiers, thermometers and air purifiers, granting Kaz exclusive worldwide distribution rights for these categories.

With sales exceeding $500 million, employing more than 4,000 employees in 80 countries, Kaz is today the world’s largest vaporizer/humidifier manufacturer and continues to be the most trusted name in the industry

“Sawaya Partners was instrumental in all aspects of this transaction, from its conception over two years ago when Braun was a division of an independent Gillette, through the closing. Importantly, Sawaya Partners’ constructive relationship and credibility with P&G helped keep the transaction moving forward despite many language, cultural and geographical divides. The Sawaya Partners team helped us structure and negotiate all elements of this complex strategic partnership and licensing agreement, thereby bringing together two of the world’s leading health & wellness brands — Vicks and Braun — and creating a global leader in health & wellness products. This is the second transformational transaction for Kaz where we have used the services of Sawaya Partners and continue to be impressed with their dedication, advice, creativity, abilities and reach.”


Kaz had successfully licensed P&G’s Vicks brand since 1995, and adding P&G’s Braun thermometers and blood pressure monitors to Kaz’s health care portfolio represented a key driver to further growth for its worldwide business. Furthermore, it would position Kaz as a privileged partner with P&G for all of its health & wellness brands as licensing opportunities might arise in the future. Specifically, the objectives for the acquisition were as follows:

  • Expand relationship with P&G by bringing their two leading health & wellness licenses — Vicks and Braun — under the same roof.
  • Strengthen Kaz’s relationships with major retail customers in North America, Europe and Asia by offering a more comprehensive line of consumer durables in the health & wellness category.
  • Expand on Kaz’s global infrastructure and sales reach, specifically in Europe.
  • Creatively structure the economic and financing terms of the transaction.

As part of Kaz’s strategy to expand its health & wellness business, Sawaya Partners initiated discussions in 2004 with The Gillette Company (“Gillette”), Braun’s prior owner, regarding the potential divestiture of its non-core thermometer and blood pressure monitor businesses. These discussions were interrupted in January 2005 when P&G and Gillette entered into merger discussions.

Two years later, with the majority of the integration behind them, the two parties resumed discussions, again, on an exclusive basis. Working alongside Kaz’s counsel, Sawaya Partners led the negotiations of the economic terms of the partnership as well as the terms of the “carve out” of the business from Braun GmbH’s (“Braun”) highly integrated engineering and manufacturing infrastructure. Four separate agreements were negotiated and executed: the purchase agreement, a multi-year supply agreement, a trademark license agreement covering the Braun brand, and a short-term transition services agreement.

The transaction represented a strategic inflection point in Kaz’s evolution. The partnership with Braun expands the Kaz product portfolio, increases its international presence, particularly in Europe, and establishes a platform for further organic and external growth in the health & wellness category.

  • Kaz and Braun signed a 5-year strategic partnership under which Kaz acquired Braun’s Thermoscan line of infrared thermometers and the VitalScan/Sensor Control line of oscillometric blood pressure monitors. The transaction also included the pre-existing professional distribution arrangement with Welch Allyn, under which Braun’s Thermoscan products are marketed to physician’s offices throughout North America.
  • Under the terms of a multi-year supply agreement, the Braun organization agreed to manufacture the highly engineered devices and to assist Kaz in the manufacturing transition.
  • Importantly, the transaction includes a landmark trademark license agreement the terms of which allow Kaz to market these two product lines under the well recognized Braun brand on an exclusive basis worldwide. This is the first time Braun has ever agreed to a license agreement of this scope.
  • Finally, the transaction added approximately $100 million in worldwide sales for the acquired product lines.

Prior to the transaction, Kaz was the U.S. market leader in digital thermometers, and with the addition of Braun Thermoscan, it became the worldwide thermometer leader