Church & Dwight Announces Acquisition, Stock Rises ~4%




On March 28, Church & Dwight (CHD) announced that it has agreed to acquire the FLAWLESS brand from Ideavillage for ~$900 million. According to the terms of the deal, Church & Dwight will be paying $475 million in cash and another $425 million in an “earn-out payment” based on the 12-month net sales target.

Acquisitions and innovation have been the driving factors behind Church & Dwight’s stellar sales. Church & Dwight’s top line has grown at an average rate of 11.1% in the past six quarters, which reflects incremental sales from its acquisitions including WATERPIK. The company has also generated strong organic sales, better than most of its peers, due to innovation-led product launches.

Management expects the acquisition to boost its sales growth rate. The FLAWLESS brand remains popular among consumers. The acquisition is expected to generate a double-digit sales growth rate. The strong product pipeline and expanded distribution are expected to support the sales growth rate.

Church & Dwight shares closed ~4% higher following the announcement of the acquisition.

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Stock performance

Church & Dwight shares have risen 9.4% on a YTD (year-to-date) basis as of March 28. In comparison, the stock prices of other major consumer packaged goods companies are also trending upward. Colgate-Palmolive (CL), Procter & Gamble (PG), Kimberly-Clark (KMB), and Clorox (CLX) stock have risen 13.2%, 12.7%, 8.7%, and 4.7%, respectively, on a YTD basis.


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