01.06.12
The Clorox Company has acquired Aplicare, Inc. and HealthLink, providers of infection control products for the health care industry. These acquisitions are important steps in the company's effort to increase exposure to faster-growing categories as part of an ongoing portfolio transformation, according to the company, and they also complement and expand the breadth and depth of the health care portfolio of Clorox’s Away From Home business unit.
The combined purchase price for both transactions was in the range of $80 million to $90 million, subject to post-closing adjustments, and was funded through cash and commercial paper borrowing, according to Clorox.
"One element of our strategy is making targeted, strategic acquisitions to drive faster growth," said Clorox chairman and CEO Don Knauss. "Aplicare and HealthLink build on the success of our 2010 Caltech acquisition, which has strengthened our leadership in bleach-based hard-surface disinfection in hospitals. These transactions reinforce the company's commitment to meet the unique needs of the health care industry, where the use of infection control products is growing rapidly in response to increased attention on helping prevent health care-associated infections."
Aplicare, based in Meriden, CT, specializes in developing and manufacturing different forms of products for helping prevent skin infection from needles or surgery. The company sells its products to hospitals and to other companies that create kits for use by health care facilities.
"We can greatly benefit from Aplicare's expertise in developing FDA-regulated products and from entry into a new channel of distribution to the manufacturers of surgical kits, where we do not sell our products today," said Craig Stevenson, vice president and general manager, Clorox Away From Home business unit.
HealthLink, Jacksonville, FL, bundles an assortment of products, including AloeGuard antimicrobial hand soap, for use by individual physicians, doctors' offices, outpatient care centers and other health care facilities.
"HealthLink has a broad portfolio of infection prevention products and strong relationships with the major health care product distributors who represent their products to thousands of health care sites across the U.S.," Stevenson said.
Combined, Aplicare and HealthLink represent more than one percent of Clorox Company annual sales on an ongoing basis and will be slightly dilutive to diluted earnings per share in fiscal year 2012.
The combined purchase price for both transactions was in the range of $80 million to $90 million, subject to post-closing adjustments, and was funded through cash and commercial paper borrowing. The transactions will not impact Clorox's dividend policy or plans to repurchase shares using the remaining proceeds from the sale of the company's former Auto Care businesses.
According to a report by the Freedonia Group, infection control in the U.S. is a $2.5 billion market and expected to grow to $3 billion in the next five years. The U.S. Department of Health and Human Services estimates that one in 20 hospital patients has a health care-associated infection at any given time.
"These acquisitions are great examples of using our strong cash flow to expand our portfolio of leading brands where there are significant tailwinds to drive growth," Knauss said.