Clorox buys Connecticut-based Aplicare, Florida-based HealthLink, providers of infection control products for the healthcare industry, to increase exposure to faster-growing categories, transform portfolio; combined purchase price totals US$80M-US$90M
January 5, 2012
– The Clorox Company CLX -0.37% announced today that it has acquired Aplicare, Inc. and HealthLink, leading 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. The acquisitions complement and expand the breadth and depth of the health care portfolio of the company's Away From Home business.
"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, Conn., 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, based in Jacksonville, Fla., bundles a wide assortment of products -- including AloeGuard(R) 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 1 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, and these infections are responsible for approximately $28 billion to $33 billion in preventable health care costs a year.
"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.
The transactions closed during the last week of December 2011.
The Clorox Company The Clorox Company is a leading manufacturer and marketer of consumer products with 8,100 employees and fiscal year 2011 revenues of $5.2 billion. Clorox markets some of consumers' most trusted and recognized brand names, including its namesake bleach and cleaning products, Green Works(R) naturally derived home care products, Pine-Sol(R) cleaners, Poett(R) home care products, Fresh Step(R) cat litter, Kingsford(R) charcoal, Hidden Valley(R) and K C Masterpiece(R) dressings and sauces, Brita(R) water-filtration products, Glad(R) bags, wraps and containers, and Burt's Bees(R) and gued(TM) natural personal care products. Nearly 90 percent of Clorox Company brands hold the No. 1 or No. 2 market share positions in their categories. The company's products are manufactured in more than two dozen countries and marketed in more than 100 countries. Clorox is committed to making a positive difference in the communities where its employees work and live. Founded in 1980, The Clorox Company Foundation has awarded cash grants totaling more than $84 million to nonprofit organizations, schools and colleges. In fiscal year 2011 alone, the foundation awarded $4 million in cash grants, and Clorox made product donations valued at $13 million. For more information about Clorox, visit www.TheCloroxCompany.com .
About Clorox Away From Home Clorox Professional Products Company (Away From Home business) markets some of the most trusted and recognized brand names for health care settings, including Clorox Commercial Solutions(R) Ultra Clorox(R) Germicidal Bleach, Clorox Commercial Solutions(R) Germicidal Wipes, DISPATCH(R) Hospital Cleaner Disinfectant with Bleach Towels and Sprays, and Clorox(R) Broad Spectrum Quaternary Disinfectant Cleaner. These Clorox products are fast-acting, EPA-registered disinfectants intended for use by health care personnel on environmental surfaces and medical equipment to help reduce the spread of pathogens that cause health care-associated infections (HAIs). With the acquisition of Caltech Industries, Clorox has become one of the leading providers of bleach disinfectants in more than 2,500 acute care facilities across the nation. With a deeper commitment to providing efficacious solutions to the health care industry, Clorox will continue to build upon its history of helping the health care industry stop the spread of pathogens. For more information, visit www.cloroxprofessional.com