03.21.06
Colgate-Palmolive Company has agreed to purchase Tom's of Maine. Toms of Maine, founded in 1970, leads the naturals market in the U.S., which is valued at $3 billion and is growing at 15% per year.
Reuben Mark, Colgate's chairman and chief executive officer said, "We have great admiration for Tom and Kate Chappell [the pioneers of natural toothpaste, mouthwash and deodorant] 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, Maine."
Ian Cook, Colgate's president and chief operating officer said that the acquisition allows Colgate to strongly enter a new channel of distribution and establish the company as the only global oral care company in that channel.
Tom's of Maine co-founders Tom and Kate Chappell stated that they chose Colgate as their partner because Colgate has the global expertise to help take Tom's of Maine to the next level. They also stated that they see Colgate as an excellent fit with thier own cultural values.
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. Colgate's profits are 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.