Burt's Bees Buzzes to Clorox in $925M Sale
Posted October 31, 2007 1:00 p.m. EDT
Updated October 31, 2007 3:01 p.m. EDT
Morrisville, N.C. — Clorox Co. (NYSE:CLX) announced Wednesday that it would acquire Morrisville-based Burt's Bees, which makes natural creams, lotions and other personal care products, for $925 million in cash.
Clorox officials said the move would help in its strategy to move beyond its core market of cleaning products into fast-growing, higher-margin consumer products.
“This acquisition allows us to enter a growing market that’s consistent with consumer megatrends,” Clorox Chairman and Chief Executive Donald Knauss said in a statement. “The Burt’s Bees brand is well-anchored in sustainability and health and wellness, and we believe it will benefit from natural and green tailwinds. It’s in an economically attractive category with a margin structure that will be highly accretive to Clorox."
The fragmented U.S. natural personal care market represents about $6.4 billion in sales and is growing at about 9 percent a year, officials said.
Knauss said the company plans to team Burt's Bees with its Green Works line of natural cleaning products and Brita water filtration products.
Clorox plans to fund the deal for all of Burt's Bees outstanding stock with cash on hand and short-term borrowing, officials said. The transaction is expected to close by the end of the year.
Founded in 1984 by Roxanne Quimby and Burt Shavitz, Burt’s Bees grew from a roadside operation in Maine to a thriving business in the Triangle. Quimby later acquired Shavitz' share of the business, but in 2003, sold majority interest in the company to New York investment bank AEA Investors.
AEA expanded the Burt's Bees line beyond natural-products stores into mainstream national retail chains to gain a more widespread consumer market. It has become one of the leading natural brands in the U.S.
“I’m delighted we’re entering into this partnership with Clorox and that I will be part of this exciting next step for Burt’s Bees,” company President and Chief Executive John Replogle said in the statement. “The Clorox Co. and Burt’s Bees have complementary values, visions and strengths. Together, I believe Clorox and Burt’s Bees can help this business realize its full potential.”
Clorox officials said the company would continue to be based in North Carolina.