With the acquisition, the industry loses another privately-held company. Max and Elaine Appel founded Orange Glo International nearly 20 years ago. Over the years, the couple and their children built a major household cleaning company based on household cleaners derived from Valencia oranges. Later, the company was one of the first to capitalize on the oxygen-based stain fighting concept. But in both cases, multinationals such as S.C. Johnson and Procter & Gamble entered the market and eroded Orange Glo’s share. At its peak, the company enjoyed sales of about $300 million, according to industry sources.
Church & Dwight’s 2005 corporate sales of $1.7 billion included laundry and household cleaning products of $450 million. The company’s Arm & Hammer and Xtra brands make it the No. 3 player in the $6 billion (retail) U.S. laundry detergent market. Church & Dwight was ranked No. 16 in The Top 50.
Despite increased competition from P&G and others, Church & Dwight executives note that OxiClean is still the No. 2 brand in the $1 billion (retail) laundry additives market, as well as the leader in the pre-wash segment of that market.
“OxiClean is a great complement to our Arm & Hammer and Xtra brands and provides access to one of the fastest growing parts of the laundry category—additives,” said James R. Craigie, president and chief executive officer, Church & Dwight. “OxiClean also brings to our company a franchise that has developed great consumer loyalty. This transaction is consistent with our growth strategy of strengthening our businesses by adding leading brands in areas of high growth potential,” Mr. Craigie added.
Growth in the pre-wash additives segment has been the result of consumers’ desire for better stain removal and to enhance the cleaning attributes of liquid laundry products, the company said.
The transaction is structured as an asset purchase resulting in a cash benefit from tax depreciation with a net present value of over $60 million.
Orange Glo International reported a 2005 operating profit before charges of $17 million. Although Church & Dwight expects to continue managing it as a separate business unit, combining operations is anticipated to result in cost synergies of over $20 million a year by the middle of 2008.
Church & Dwight will finance the acquisition with a $250 million addition to its bank credit facility combined with available cash.
Orange Glo International’s chairman, David Appel, said, “Our company was founded in 1987 on the premise that Orange Glo’s products should delight consumers with innovative new ways to clean and be powerful without compromising the health of the home or the environment. It was important to us that this