• by Steve Ellwanger , September 13, 2022

Church & Dwight Co. Inc. is expanding its portfolio of hair and skin products with the acquisition of Hero Cosmetics Inc., whose Mighty Patch is the #1 patch brand for acne treatment.

The Hero acquisition is expected to close in the fourth quarter.

Adding in Hero’s balms and creams, the company is the #2 acne-care brand in the United States.

According to Morningstar analyst Erin Lash, the “strategic merit” of the $630 million deal is Church & Dwight leveraging “its network within the personal care realm to expand Hero’s distribution.”

Founded in 2017, Hero does not currently have overseas distribution, but that will be part of Church & Dwight’s strategy for the brand going forward.

In a presentation at last week’s Barclays Global Consumer Staples Conference, Church & Dwight executives said Hero has 4.4% household penetration in acne total acne care category (which in total has only 23% HH penetration).

“The patch form has grown to 18% of the acne treatment category as more consumers transition away from lotions and ointments to a patch solution,” Church & Dwight CEO Matthew Farrell said in a news release.

Hero “skews towards younger consumers and consistently has a high level of brand loyalty and repeat purchase.”

According to Church & Dwight, Hero’s net sales for the trailing 12 months through June 30 were approximately $115 million. The total U.S. retail acne treatment category is approximately $700 million.

According to a report by Harvard Medical School, acne can affect people beyond adolescence or develop for the first time in adulthood.

“This may be particularly distressing for adult women, who are more likely to get acne after the age of 20 compared to men,” the report notes.

The overwhelming majority of Hero’s two dozen videos on YouTube over the past year have featured women.

This nearly seven-minute spot explains Hero’s Lightning Swipe pads, which are designed to eliminate post-blemish dark spots.

Church & Dwight’s hair and skin brand portfolio includes Nair, Batiste, Viviscal, Flawless and Toppik.

 

 

 

https://www.youtube.com/watch?v=uFmGYRR8ICA

 

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