Clorox announces acquisition of Renew Life in fast-growing digestive health category
Renew Life is the number one brand of probiotics in the natural channel, with a steadily growing share in the food, drug and mass channel
The Clorox Company has announced its acquisition of Renew Life, a leading brand in dietary health, with an emphasis on digestive health.
Renew Life is the number one brand of probiotics in the natural channel, with a steadily growing share in the food, drug and mass channel.
'For more than 100 years, the Clorox portfolio has been firmly rooted in health and wellness, first through the disinfecting properties of bleach, and later extending into Brita and Burt's Bees to meet the needs of health conscious consumers,' said Clorox CEO, Benno Dorer.
'The Renew Life acquisition is consistent with our strategy to accelerate growth through bolt-on acquisitions of leading brands into fast-growing categories with attractive margins. Two thirds of the adult population in the US have experienced digestive issues in the past 12 months, and that population is likely to increase because of dietary habits. We're looking forward to bringing the benefits of Renew Life's digestive health products to more consumers and leveraging Clorox's proven capabilities in brand building and distribution expansion to accelerate growth.'
The highly fragmented digestive supplement market currently represents sales of at least $10 billion in the US alone and is currently growing at about 7%. The probiotics subcategory, which is $1.3 billion in the US, is expected to grow at 15% per year, and probiotics products represent about two thirds of current Renew Life sales. Numerous studies support the general benefit of probiotics in supporting a healthy digestive tract.
In calendar year 2015, Renew Life generated sales of about $115m and had gross margins generally in line with The Clorox Company average. Under the terms of the deal, which closed on 2 May 2016, Clorox acquired Renew Life Holdings Corporation from Swander Pace Capital and other shareholders for approximately $290m in cash, subject to post-closing adjustments.
The purchase price represents 2.5 times sales. In fiscal year 2017, which begins 1 July 2016, the business is anticipated to add sales of nearly 2 percentage points to Clorox's top line.
