Clorox acquires Burt’s Bees for $925 million
OAKLAND, Calif. Clorox, known for its namesake bleach and cleaning products, is expanding beyond its core categories by acquiring Burt’s Bees, a maker of natural personal care products.
Clorox is acquiring the company for $925 million net of an additional $25 million payment for anticipated tax benefits. The deal is expected to close by the end of the calendar year.
“The Burt’s Bees brand is well-anchored in sustainability and health and wellness, and we believe it will benefit from natural and ?green’ tailwinds. It is in an economically attractive category with a margin structure that will be highly accretive to Clorox,” stated Clorox chairman and chief executive officer Donald Krauss. “Combined with our new Green Works line of natural cleaning products, and Brita water-filtration products, we can leverage Burt’s Bees extensive capabilities and credibility to build a robust, higher-growth platform for Clorox.”
The U.S. natural personal care market represents about $6.4 billion in sales and is currently growing at about 9 percent annually, according to the company.
Clorox stated that the acquisition is in line with its strategy to pursue growth in areas aligned with consumer “megatrends” in health and wellness, sustainability, convenience and a more multicultural marketplace.
Burt’s Bees president and chief executive officer John Replogle will continue to lead the company, which will continue to be based in North Carolina. Beth Springer, Clorox’s executive vice president of strategy and growth, will oversee the business.
It is estimated that Burt’s Bees will add nearly two points of top-line growth to Clorox in fiscal years 2008 and 2009.
Including estimates of purchase-accounting adjustments and one-time transaction and integration costs, the company anticipates that the transaction will dilute its fiscal year 2008 earnings by about 10 cents to 15 cents per diluted share and that it will be slightly accretive in fiscal year 2009.
Colgate-Palmolive releases strong Q3 results
NEW YORK Colgate-Palmolive announced on Tuesday that it experienced a strong third quarter as new U.S. product launches in the super-premium category contributed to growth in oral care.
Worldwide sales grew 12 percent to $3.5 billion and unit volume grew 5.5 percent. Excluding divestments, worldwide sales and unit volume grew 13 percent and 6.5 percent, respectively. The growth was supported by a 12 percent boost in worldwide ad spending.
Net income and diluted earnings per share were $420.1 million and 77 cents, respectively. Excluding restructuring charges and SFAS 88 charges, net income in the quarter rose 16 percent to $466.4 million and diluted earnings per share increased 18 percent to 86 cents.
In the United States, Colgate Total Advanced Clean toothpaste, supported by an integrated marketing campaign featuring Brooke Shields and a professional sampling program, helped drive market share for Colgate Total toothpaste to its highest quarterly share ever at 15.3 percent.
Colgate Max Fresh BURST toothpaste, infused with 50 percent more mini breath strips, continues to build incremental market share for the Max Fresh equity, now at 3.9 percent year to date.
Meanwhile, the company’s share of the manual toothbrush market is 25.6 year to date, up 2 share points versus a year ago, fueled by the continued success of Colgate 360 degree manual toothbrush and its latest variant Colgate 360 degree Sensitive.
New products planned for the fourth quarter include Softsoap brand SPA Radiant body wash and liquid hand soap, Irish Spring Moisture Blast and Irish Spring Reviving Mint body washes, Softsoap brand Pink Grapefruit liquid hand soap and Mennen Speed Stick 24/7 Momentum deodorant.
Alberto-Culver announces positive full-year results
MELROSE PARK, Ill. Alberto-Culver, whose brands include TRESemme, Alberto VO5, Nexxus and St. Ives, recorded a sales increase of 10.2 percent for the fiscal year, marking the first full year results since the company split its consumer products business and its Sally Beauty/BSG distribution business.
Net sales for the fiscal year rose 10.2 percent to $1.54 billion from $1.40 billion in the year-ago period.
Net earnings totaled $78.3 million, or 80 cents per diluted share, compared with $205.3 million, or $2.20 per share, in the year-ago period.
Diluted earnings per share from continuing operations were 83 cents after deducting 23 cents for restructuring and other expenses. Diluted earnings per share, excluding restructuring and other expenses, rose 24.7 percent to $1.06 versus 85 cents in the year-ago period.
In November 2006, the company closed on the separation of its consumer products business and its beauty supply distribution business. The split resulted in two separate publicly-traded companies: new Alberto-Culver, manufacturer and marketer of beauty and personal care products, and Sally Beauty Holdings, a distributor of professional beauty supplies.
In addition, Alberto-Culver’s board of directors approved the regular 5.5 cent quarterly cash dividend. The dividend will be paid Nov. 20 to shareholders of record on Nov. 5.