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Church & Dwight to Acquire Orajel
Posted: April 1, 2008
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The Orajel brand has been in the market for over 40 years and has strong brand equity in a growing area of premium oral care. The brand is well known for aiding consumers with toothaches and baby teething as well as a growing toddler's toothpaste business, the Company said.The Del Pharmaceuticals business includes 2007 EBITDA of approximately $28 million. Church & Dwight expects to combine operations which will result in additional cost synergies of over $10 million a year by the end of 2009. The Orajel products are expected to be integrated into existing Church & Dwight manufacturing facilities by the end of 2009.
The transaction is structured as an asset purchase resulting in a cash tax benefit from intangibles amortization with a net present value of $90 million. The company will finance the acquisition with an addition to its bank credit facility combined with available cash and existing lines of credit.
The acquisition is expected to have a neutral impact on 2008 earnings per share due primarily to one-time integration costs and the step-up of inventory. "We expect it to be accretive in 2009 and contribute meaningfully to earnings and free cash flow. We also remain comfortable with our previously announced objective of achieving $2.77 in earnings per share for 2008, including any impact from the acquisition," said Craigie.
