Church & Dwight Co. has emerged the winner in the auction-based acquisition of #2 non-alcohol mouthwash brand TheraBreath for $580 million.
With a 14% share of the U.S. alcohol-free mouthwash category, premium-priced TheraBreath is Church & Dwight’s biggest acquisition since it purchased Matrixx Initiatives Inc. and its Zicam zinc-supplements brand last year for $530 million.
“We see TheraBreath as a perfect tuck-in acquisition for our oral care business, with $100 million of sales projected for 2022, high gross margins and the ability to deliver annual sales growth that exceeds our 3% evergreen model thereafter,” Church & Dwight CEO Matthew Farrell said today on a conference call with financial analysts.
“We expect 15% net sales growth in 2022, which follows double-digit growth for each of the past three years.”
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Church & Dwight’s oral care portfolio includes Arm & Hammer toothpaste, pain reliever Orajel, Spinbrush electric toothbrushes and Waterpik water flossers.
According to Farrell, Church & Dwight will concentrate on growing TheraBreath mouthwash.
“It’s clearly a premium mouthwash and retailers really like the presence of a successful premium brand in the category,” Farrell said. “That’s been proven out by the amount of distribution gains the brand has gotten over the past three years.”
The #1 alcohol-free U.S. mouthwash brand is Crest, with a 34% share of the category.
“It is a fragmented category, but this brand has come on strong over the past three years,” Farrell said of TheraBreath.
Founded in 1993 by Dr. Harold Katz, 85% of TheraBreath sales are from mouthwash. It also sells toothpaste, brushes, gums and lozenges.
Less than 10% of the company’s net sales are generated in such overseas markets as Asia and Europe. About 20% of sales are from ecommerce.
Asked whether Dr. Katz—who has figured prominently in TheraBreath’s advertising—will continue to be associated with the brand, Farrell added, “We have a good relationship with Dr. Katz going forward.”
The auction for TheraBreath began a few months ago and concluded on Thanksgiving Day, according to Farrell.