Church & Dwight Acquires Zicam Brand for $530 Million
December 01 2020 - 6:55AM
Business Wire
Church & Dwight Co., Inc. (NYSE: CHD) has completed the
acquisition of Matrixx Initiatives, Inc., the owner of the ZICAM™
brand for $530 million. The acquisition was structured as a stock
purchase that the Company financed with a combination of cash and
debt. Zicam is the #1 zinc supplement in the United States in the
VMS (vitamins, minerals, and supplements) cough/cold shortening
category. Zicam shortens the duration of a cold using zinc as the
core active ingredient.
“The acquisition of Zicam represents a superb addition to our
existing portfolio and brings to our Company the leading brand
within zinc supplements, one of the fastest-growing sub-segments of
the VMS category, said Matthew Farrell, Chairman and Chief
Executive Officer of Church & Dwight.
“This acquisition meets the Company's long-standing acquisition
criteria. Specifically, Zicam is a (1) #1 brand in a niche
category; (2) asset-light; (3) a growing brand, and (4) expected to
be gross margin accretive to the Company. We are excited about
adding the Company’s 13th power brand. Acquisitions have been a key
driver of Church & Dwight’s consistently strong shareholder
returns.”
Zicam’s annual net sales are projected to be approximately $90
million in 2021 and EBITDA is expected to be approximately $36
million. Once Zicam is fully integrated, Church & Dwight
expects to leverage its distribution network, operating discipline,
and support functions to generate anticipated annual cost savings
of approximately $5 million by 2022.
Zicam is expected to be approximately 3% accretive to cash
earnings in 2021. The acquisition is expected to be neutral to Q4
2020 earnings per share (EPS) and neutral to 2021 EPS due to
intangible amortization, interest expense, transition expenses, and
higher marketing spending.
Church & Dwight will discuss the acquisition during a
management call on December 1, 2020 at 9:00 a.m. (ET). To
participate, dial 877-322-9846 within the U.S. and Canada, or
631-291-4539 internationally, using access code 6273493. You can
also participate via the Investor Relations section of the
Company’s website at www.churchdwight.com.
Church & Dwight Co., Inc., founded in 1846, is the leading
U.S. producer of sodium bicarbonate, popularly known as baking
soda. The Company manufactures and markets a wide range of personal
care, household and specialty products under recognized brand names
such as ARM & HAMMER®, TROJAN®, OXICLEAN®, SPINBRUSH®, FIRST
RESPONSE®, NAIR®, ORAJEL®, XTRA®, L’IL CRITTERS® and VITAFUSION®,
BATISTE®, WATERPIK®, AND FLAWLESS®. These twelve key brands
represent approximately 85% of the Company’s product sales. For
more information, visit the Company’s website.
This press release contains forward-looking statements,
including, among others, statements relating to the impact of the
Zicam acquisition and anticipated associated cost savings; net
sales, earnings growth and cash earnings; earnings per share; and
consumer demand and spending. These statements represent the
intentions, plans, expectations and beliefs of the Company, and are
based on assumptions that the Company believes are reasonable but
may prove to be incorrect. In addition, these statements are
subject to risks, uncertainties and other factors, many of which
are outside the Company’s control and could cause actual results to
differ materially from such forward-looking statements.
Uncertainties include assumptions as to market growth and consumer
demand. Factors that could cause such differences include, without
limitation, the risk that Zicam will not be integrated
successfully, the risk that the cost savings from the transaction
will not be fully realized or will take longer to realize than
expected, and the ability of management to execute its plans with
respect to the Company’s initiatives.
For a description of additional factors that could cause
actual results to differ materially from the forward-looking
statements, please see the Company’s quarterly and annual reports
filed with the SEC, including Item 1A, “Risk Factors” in the
Company’s annual report on Form 10-K and quarterly reports on Form
10-Q. The Company undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by the U.S. federal
securities laws. You are advised, however, to consult any further
disclosures the Company makes on related subjects in its filings
with the SEC.
This press release also contains non-GAAP financial
information. The non-GAAP financial measures should not be
considered in isolation or as a substitute for the comparable GAAP
measures. In addition, these non-GAAP financial measures may not be
the same as similar measures provided by other companies due to
potential differences in methods of calculation and items being
excluded.
Non-GAAP information:
EBITDA:
This press release also presents Zicam’s EBITDA. EBITDA is a
non-GAAP financial term and represents earnings before interest,
taxes, depreciation and amortization. Management believes the
presentation of EBITDA provides useful additional information to
investors about trends in Zicam’s operations.
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version on businesswire.com: https://www.businesswire.com/news/home/20201201005479/en/
Rick Dierker Chief Financial Officer
609-806-1900
Church and Dwight (NYSE:CHD)
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