Clorox to Purchase Colgate's Canada and Latin America Bleach Businesses
Wednesday December 20, 9:01 am ET
OAKLAND, CALIF., December 20 /CNW/ - The Clorox Company today announced a definitive agreement to purchase Colgate-Palmolive Company's bleach businesses in Canada, Colombia, Dominican Republic, Ecuador, Uruguay and Venezuela for an aggregate price of $126 million plus inventory.
"These acquisitions extend our position as the bleach market leader in the Americas," said Don Knauss, Clorox's chairman and chief executive officer. "They provide a platform for growth with proven laundry and home cleaning products and provide a great opportunity to further build our health-and-wellness platform."
Included in the transaction are Javex(R) bleach in Canada, the Nevex(R) brand in Venezuela and the Agua Jane(R) brand in Uruguay. Additionally, Colgate is granting to Clorox a license to their Ajax(R) trademark for bleach for a transition period in Colombia, the Dominican Republic and Ecuador. The brands, which will generate estimated sales of about $77 million for the calendar year ending Dec. 31, 2006, are the branded category leaders in each of these countries, with the exception of Colombia where Clorox holds the No. 1 market position for bleach. Clorox will acquire two manufacturing facilities, one in Alberta, Canada, and one in Venezuela; and employees at these facilities will transfer to Clorox. Colgate will provide transition services to Clorox for varying periods of time in each country to ensure a smooth transition.
The transaction will be structured as an all cash acquisition. The companies anticipate closing the purchase and sale of the Canada business later this month and the Latin America businesses in the first calendar-year quarter of 2007. The purchase is subject to regulatory and other customary approvals and closing conditions.
Clorox anticipates the transaction will be modestly dilutive to earnings for a period of 12-18 months as the company invests to transition and revitalize the brands. Specifically, Clorox anticipates the acquisition will reduce diluted earnings per share in a range of 3-4 cents in the second half of its current fiscal year, which ends June 30, 2007. The earnings impact of this transaction was not included in the company's outlook communicated on Nov. 1, 2006.
Source: The Clorox Company
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