(RTTNews) - Church & Dwight Co., Inc. (CHD) on Tuesday signed a definitive agreement to acquire the Hero Mighty Patch brand (Hero) and other acne treatment products for $630 million, consisting of cash and Church & Dwight restricted stock.
Mighty Patch is the #2 brand in the acne category in the U.S. and the #1 patch brand in acne. The transaction, which is subject to customary closing conditions, is expected to close in the fourth quarter.
The acne patch is the fastest growing treatment form in acne. The products are currently only marketed in the U.S.
Church & Dwight expects to expand Mighty Patch's limited distribution by leveraging its US retailer relationships and international footprint. It intends to maintain the New York City location and retain Hero employees. The founders are expected to remain and continue to run the business while leveraging Church & Dwight's scale and capabilities.
Looking ahead, Church & Dwight expects full year adjusted earnings of $2.97 per share on reported sales growth of 2 to 4 percent (previously 4 to 5 percent), reflecting the incremental growth from Hero offset by continued softness across its more discretionary brands.
For the third quarter, Church & Dwight now expects reported sales to decline 1 percent, compared to the previous growth outlook midpoint of 3 percent.
