Rebecca Wright03.21.06
Colgate-Palmolive Company, New York, NY, as part of its strategy to focus on its higher-margin oral and personal care businesses, has agreed to purchase Tom's of Maine, Kennebunk, ME, a leader in the fast-growing “naturals” market in the U.S.
The U.S. market for natural oral and personal care products is valued at $3 billion and is growing at 15% per year. Tom's of Maine, founded in 1970 by Tom and Kate Chappell, pioneered natural toothpaste, mouthwash and deodorant, and is the #1 Oral Care Brand in the Natural category. Tom's of Maine gives Colgate the opportunity to enter the fast growing health and specialty trade channel where Tom's toothpaste is the clear market leader commanding 60% share of that channel.
Reuben Mark, Colgate's Chairman and CEO said, "We have great admiration for Tom and Kate Chappell and the values-based business they have created. The combination of Colgate, the global leader in oral care, and Tom's of Maine, the leader in the naturals category, is an exciting partnership with growth opportunities for both companies. And we're especially pleased that Tom Chappell will remain on to lead the company, which will continue to be based in Kennebunk, ME."
Ian Cook, Colgate's President and COO, said, "This acquisition allows Colgate to strongly enter a completely new channel of distribution and establishes us as the only global oral care company in that channel. This bodes well for additional opportunities in other high margin categories such as personal care. Further, our truly global reach will help speed the growth of the naturals health and specialty business outside the U.S. With gross profit margins a full ten percentage points higher than Colgate's margin, Tom's of Maine is a logical acquisition as we continue to prioritize our global oral and personal care categories."
Tom's of Maine co-founders Tom and Kate Chappell said, "We chose Colgate as our partner because they have the global expertise to help take Tom's of Maine to the next level. Just as importantly, we see Colgate as an excellent fit with our own cultural values. Colgate has a commitment to product excellence, to global efforts to promote oral health and has a 200-year history of caring for consumers and for giving back to the community. We are excited by Colgate's desire to continue Tom's of Maine leadership and heritage in natural care."
The transaction will be structured as an all cash acquisition of 84% of the outstanding shares of Tom's of Maine for an aggregate price of approximately $100 million, subject to adjustment at closing, which is expected in the second quarter of this year. The effect on Colgate's profits is expected to be neutral in 2006 and increasingly positive each year thereafter. The Chappell family will retain a 16% ownership interest, with additional share purchase opportunities for Colgate over the coming years.
The U.S. market for natural oral and personal care products is valued at $3 billion and is growing at 15% per year. Tom's of Maine, founded in 1970 by Tom and Kate Chappell, pioneered natural toothpaste, mouthwash and deodorant, and is the #1 Oral Care Brand in the Natural category. Tom's of Maine gives Colgate the opportunity to enter the fast growing health and specialty trade channel where Tom's toothpaste is the clear market leader commanding 60% share of that channel.
Reuben Mark, Colgate's Chairman and CEO said, "We have great admiration for Tom and Kate Chappell and the values-based business they have created. The combination of Colgate, the global leader in oral care, and Tom's of Maine, the leader in the naturals category, is an exciting partnership with growth opportunities for both companies. And we're especially pleased that Tom Chappell will remain on to lead the company, which will continue to be based in Kennebunk, ME."
Ian Cook, Colgate's President and COO, said, "This acquisition allows Colgate to strongly enter a completely new channel of distribution and establishes us as the only global oral care company in that channel. This bodes well for additional opportunities in other high margin categories such as personal care. Further, our truly global reach will help speed the growth of the naturals health and specialty business outside the U.S. With gross profit margins a full ten percentage points higher than Colgate's margin, Tom's of Maine is a logical acquisition as we continue to prioritize our global oral and personal care categories."
Tom's of Maine co-founders Tom and Kate Chappell said, "We chose Colgate as our partner because they have the global expertise to help take Tom's of Maine to the next level. Just as importantly, we see Colgate as an excellent fit with our own cultural values. Colgate has a commitment to product excellence, to global efforts to promote oral health and has a 200-year history of caring for consumers and for giving back to the community. We are excited by Colgate's desire to continue Tom's of Maine leadership and heritage in natural care."
The transaction will be structured as an all cash acquisition of 84% of the outstanding shares of Tom's of Maine for an aggregate price of approximately $100 million, subject to adjustment at closing, which is expected in the second quarter of this year. The effect on Colgate's profits is expected to be neutral in 2006 and increasingly positive each year thereafter. The Chappell family will retain a 16% ownership interest, with additional share purchase opportunities for Colgate over the coming years.
