S.C. Johnson to sell bonds to buy Sara Lee unit

S.C. Johnson & Son Inc., the seller of Glade air freshener and Windex cleaning spray, plans to issue debt for the first time since 2003 to fund a purchase from Sara Lee Corp. and refinance long-term borrowings.

The company plans to sell $550 million of 30-year bonds as soon as today, according to a person familiar with the transaction. The notes may yield about 130 basis points more than similar-maturity Treasuries, said the person, who declined to be identified because terms aren't set. A basis point is 0.01 percentage point.

Closely held S.C. Johnson, based in Racine, Wisconsin, agreed in June to buy Sara Lee's remaining insecticides business for 153.5 million euros ($194 million). Proceeds from the bond offering will be used to replenish cash and short-term investments to fund the acquisition, and repay some of the company's $350 million of long-term debt, the person said.

Downers Grove-based Sara Lee sold its 51 percent stake in the Godrej Sara Lee joint venture, which makes other insecticides, in May. The transaction with S.C. Johnson is expected to be completed by yearend, the companies said.

S.C. Johnson's purchase will include insecticide products marketed under the Ridsect, Bloom, Catch and Fumitox brands, the company said in a June 15 statement.

S.C. Johnson last sold debt in February 2003, when it issued $300 million of 5.75 percent, 30-year bonds in a private placement, according to data compiled by Bloomberg. Today's offering will represent the company's biggest debt sale ever, Bloomberg data show.

The notes may have a so-called poison put that would allow investors to sell the bonds back to the company at 101 cents on the dollar if there is a change of control, the person said.