Church & Dwight is acquiring TheraBreath for $580 million in cash.
Church & Dwight’s oral care portfolio is expanding.
The Ewing, N.J.-based company announced its acquisition of TheraBreath for $580 million in cash.
“Oral care is important to us strategically,” Matthew T. Farrell, Church & Dwight’s chief executive officer said. “TheraBreath represents a powerful addition to our existing oral care portfolio which includes Arm & Hammer toothpaste, Spinbrush battery-operated toothbrushes, Orajel oral analgesics and Waterpik water flossers. The TheraBreath brand is a problem/solution product and one of the fastest growing brands in the mouthwash category. This acquisition gives Church and Dwight a strong position in a growing category with tailwinds as the brand skews towards younger consumers and consistently has a high level of brand loyalty and repeat purchase.”
Known for its alcohol-free mouthwashes, TheraBreath shared that its EBITDA as of Sept. 2021 was $27 million with a 31% margin.
“We are excited about adding the Company’s 14th power brand. This acquisition meets the Company's long-standing acquisition criteria: (1) No. 1 or No. 2 brand in a category; (2) asset-light; (3) a growing brand; and (4) expected to be gross margin accretive to the Company,” Farrell said. “Acquisitions have been a key driver of Church & Dwight’s consistently strong shareholder returns.”
Through this acquisition, Church & Dwight plans to leverage its distribution network, manufacturing footprint and operating expertise to help the brand achieve an estimated $6 million in run-rate operating synergies by 2023, as well as expand its international footprint, the company said.
“We now expect 2021 adjusted earnings per share (EPS) to be $2.96, inclusive of the $0.03 dilutive EPS effect of the acquisition,” Farrell said. “The acquisition is expected to be 2% accretive to cash earnings in 2022 and neutral to 2022 EPS, inclusive of transition costs, interest expense and intangible amortization expense.”
Centerview Partners served as financial advisors to Church & Dwight and Proskauer Rose was the legal advisor.
The acquisition, which is subject to regulatory approval and customary conditions, is expected to close in the fourth quarter.