The purchase includes the Mentadent brand of toothpaste and toothbrushes, Pepsodent and Aim toothpaste, and exclusive licensing rights to Close-Up toothpaste. Sales of the business for the first six months of 2003 were $61 million.
Church & Dwight Chairman and Chief Executive Officer, Robert A. Davies, III, commented, "This transaction strengthens our strategically important oral care business, tripling our unit sales and more than doubling our dollar sales within the U.S. oral care sector. We believe this acquisition is similar to the 2001 acquisitions of USA Detergents, which doubled our position in the laundry detergents business, and the consumer products business of Carter-Wallace, which more than doubled our position in the deodorant antiperspirant business."
Mr. Davies noted that all four products to be acquired are well-established brands with distinct positions. Pepsodent and Aim, a traditional toothpaste and gel respectively, are positioned as value brands, with strong distribution in the growing mass and dollar channels. Close-Up is marketed as a value- to mid-priced breath-freshening toothpaste. Mentadent, introduced in the early 1990's as the first baking soda and peroxide toothpaste, packaged in a distinctive dual chamber pump, and premium- priced, is well recognized by consumers as a serious oral care product.
Mr. Davies added, "Although this business has recently been in decline, we believe the brand equities remain strong, and the business can be revitalized through additional focus and support."
Mr. Davies also noted that, as an asset purchase, the Company expects to be able to amortize the acquired trademarks and goodwill for tax purposes.
The Company will shift the manufacture of the acquired toothpaste brands over the next 12 months to its plant at Lakewood, NJ, which specializes in manufacturing personal care products.
The Company believes that the acquisition will be accretive to earnings over time; it is difficult, however, to provide any short-term earnings guidance due to the timing of the manufacturing transition and various marketing considerations.
The Company plans to finance the acquisition by increasing an existing medium-term borrowing facility managed by JPMorgan.
Church & Dwight Co., Inc. manufactures and markets a wide range of personal care, household and specialty products under the Arm & Hammer trademark and other well-known brand names.
This press release contains forward-looking statements that address, among other things, completion of the acquisition of the oral care business of Unilever in the United States and Canada, revitalization of the oral care business, tax treatment of the acquired trademarks and our belief that the transaction will be accretive to earnings over time. Actual results could differ materially from those described in the forward-looking statements due to, among other things, the failure of one or both of the parties to the agreement to satisfy closing conditions, our inability to increase consumer demand for the acquired products through advertising or other efforts, competition from other manufacturers of oral care products, difficulties in transitioning manufacturing of the acquired products to our facilities, our ability to complete the financing of the acquisition, the risk that changing business conditions cause us to change our plans regarding the acquired brands and changes in tax laws and regulations. More information about potential risk factors that could affect Church & Dwight's business and financial results is included in our annual report on Form 10-K for the year ended December 31, 2002, our quarterly reports on Form 10-Q for the quarters ended March 28, 2003 and June 27, 2003, and from time to time in other reports filed by Church & Dwight with the Securities and Exchange Commission. Church & Dwight undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or other events.