The Newport Beach-based producer of the Water Pik brand of shower massagers, automatic toothbrushes and pool heating systems strikes out on its own Monday, facing stiff competition from a myriad of much larger corporations.
Water Pik Technologies Inc.'s stock officially begins trading on the New York Stock Exchange after the company is spun off by Pittsburgh-based Allegheny Teledyne Inc., the world's top producer of specialty metals.
Allegheny Teledyne, seeking to focus on its core metals business, also is shedding its aerospace and electronics divisions, which will unite to form Teledyne Technologies Inc., headquartered in Los Angeles.
Water Pik executives see their company's independence as an opportunity to raise funds and focus on developing an array of new products critical to their company's growth.
Water Pik recently introduced a misting shower massage that creates a steam bath environment in the shower and expects to launch a new dental hygiene device next year, said Michael Hoopis, president and chief executive.
The company claims its sales of water-powered dental devices have captured 80% of the market and sales of pulsating shower heads top competitors with a 35% share of the market.
But Water Pik will be squaring off against much larger competitors, such as Procter & Gamble Co., Gillette Co., Clorox Co., and its ability to generate much-needed capital is uncertain, according to documents filed with the Securities and Exchange Commission.
"Water Pik is obviously a well-known brand," said Mark Minichiello, an analyst with Chicago-based Spin-Off Advisors. "But one of the concerns I would have is the size of Water Pik versus its competitors. Gillette and Procter & Gamble are large players and it's small in that universe."
Water Pik hopes to raise $50 million within the year in a subsequent stock offering, the company said.
The SEC document did not list a price range for the stock's debut Monday, but the shares first traded at $10 this week on a "when-issued" basis, then slipped to $9.50 on Wednesday. The stock's symbol will be PIK.
Shares of Teledyne Technologies, the Los Angeles-based spin-off, also will begin trading Monday on the New York Stock Exchange under the symbol TDY. The stock, which also is trading on a "when-issued" basis, closed Wednesday at $10.50, up $2.06 a share.
