Item 1.01. Entry into a Material Definitive Agreement

The Merger Agreement

     On October 11, 2006, Jacuzzi Brands, Inc., a Delaware corporation (the “Company”), Jupiter Acquisition, LLC, a Delaware limited liability company (“Parent”), and Jupiter Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Subsidiary”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Subsidiary will merge with and into the Company (the “Merger”), with the Company continuing as the surviving corporation. The Merger has been approved by the respective Boards of Directors of the Company and Merger Subsidiary, and the Board of Managers of Parent. Parent and Merger Subsidiary are affiliates of Apollo Management VI, L.P.

     Pursuant to the Merger Agreement, at the effective time of the Merger, each outstanding share of common stock, $0.01 par value, of the Company will be converted into the right to receive $12.50 in cash, without interest (the “Merger Consideration”). The Merger will be a taxable transaction for U.S. federal tax purposes and therefore stockholders will not receive any portion of the Merger Consideration on a tax-free basis.

     At or immediately prior to the effective time of the Merger, each outstanding vested or unvested stock option of the Company will become vested and cancelled and converted into the right to receive, for each share that could be purchased on the exercise thereof, the excess of the Merger Consideration over the exercise price of such option, and each Restricted Stock Award (as such term is defined in the Merger Agreement) with respect to which shares of Company stock remain unvested or awarded but unissued will be cancelled and converted into the right to receive an amount in cash equal to the Merger Consideration.

     Parent has obtained executed equity and debt financing commitments for the transactions contemplated by the Merger Agreement, the aggregate proceeds of which will be sufficient for Parent to pay the aggregate Merger Consideration and related expenses. The debt financing will be provided by Credit Suisse, Bank of America and UBS.

     In connection with the Merger, the Company will commence a tender offer and consent solicitation to repurchase all of the Company’s outstanding 9.625% Senior Secured Notes due 2010 (the “Senior Notes”). Details with respect to the self tender offer and consent solicitation will be set forth in tender offer documents. The only relevant conditions to the debt financing commitments obtained by Parent are receipt of audited financial statements of the Company for its fiscal year ended September 30, 2006, receipt of exit consents from holders of a majority of the outstanding aggregate principal amount of the Senior Notes, and there not having occurred any Material Adverse Effect, as defined in the Merger Agreement.

     Consummation of the Merger is subject to receipt by Parent of the proceeds of the debt financing contemplated by the debt financing commitments and various other customary conditions, including, among others, (i) approval of the Merger by the Company’s stockholders, (ii) the absence of any material adverse effect with respect to the Company's business, (iii) the absence of any law or regulation that prohibits the consummation of the Merger, (iv) expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and (v) receipt of any government consents and completion of any government filings required to permit the Merger. Each party’s obligation to close is also subject to the accuracy of representations and warranties of and compliance with covenants by the other party to the Merger Agreement, in each case, as set forth in the Merger Agreement. The parties expect to close the transaction in the first quarter of 2007.

     The Merger Agreement includes customary representations, warranties and covenants of the parties. The covenants of the Company include, subject to certain exceptions, covenants to (i) recommend that its stockholders vote for the approval and adoption of the Merger Agreement and the Merger, (ii) hold a stockholders’ meeting for the purpose of voting on the adoption of the Merger Agreement, (iii) not withdraw its recommendation, approve an alternative business combination transaction or proposal, or approve or enter into an agreement for an alternative business combination transaction, (iv) not solicit, encourage or facilitate alternative business combination transaction proposals and (v) not engage in discussions or negotiations concerning or disclose nonpublic information in connection with alternative business combination transactions or proposals.