Church & Dwight To Acquire TheraBreath Brand For $580 Mln In Cash - Quick Facts

Church & Dwight Co., Inc. (CHD) on Monday agreed to acquire the TheraBreath brand for $580 million in cash. TheraBreath is the second largest brand in the alcohol-free mouthwash category in the United States.

The transaction, which is subject to regulatory approval and other customary conditions, is expected to close in the fourth quarter.

TheraBreath represents a powerful addition to Church & Dwight's existing oral care portfolio which includes ARM & HAMMER toothpaste, SPINBRUSH battery-operated toothbrushes, ORAJEL oral analgesics and WATERPIK water flossers.

Once the business is fully integrated, Church & Dwight expects to leverage its distribution network, manufacturing footprint, and operating expertise to achieve an estimated $6 million in run rate operating synergies by 2023. The Company expects to expand TheraBreath's distribution through its international footprint.

In 2022, TheraBreath's annual net sales are projected to grow approximately 15% to $100 million and adjusted EBITDA is expected to be $36 million, including $4 million of synergies.

The acquisition contains the benefit of a cash tax shield valued at $85 million. Net of the tax shield, the deal is a $495 million acquisition.

The acquisition is expected to be dilutive to the Company's 2021 earnings per share by $0.03, inclusive of transition costs, acquisition-related expenses, interest expense, and intangible amortization expense. The Company expects to finance the acquisition with debt.

The acquisition is expected to be 2% accretive to cash earnings in 2022 and neutral to 2022 EPS, inclusive of transition costs, interest expense and intangible amortization expense

The company also said it now expects 2021 adjusted earnings per share to be $2.96, inclusive of the $0.03 dilutive. On average, 18 analysts polled by Thomson Reuters expect earnings of $2.99 per share for the quarter. Analysts' estimates typically exclude special items.

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