Church & Dwight Acquires USA Detergents for $99 Million
Aileen Gallagher
04/02/01 - 04:23 PM EDT
Church & Dwight (CHD) said Monday it had agreed to acquire
USA Detergents (USAD) for $7 a share in an all-cash transaction.
USA Detergents has 14.19 million shares outstanding, making the deal worth about $120 million including the assumption of debt. The merger will make Church & Dwight and its three leading brands,
Arm & Hammer XTRA and
Nice'N Fluffy, the third-largest retail laundry detergent business in the country, the company said.
Church & Dwight said it the merger would increase its laundry products sales to $400 million a year, add slightly to earnings in 2001 and contribute as much as as 5% or 6% to earnings above previous levels in 2002.
The boards of directors of both companies have approved the deal.
The merger stems from a joint venture between the two companies that began in June 2000 and became operational on Jan. 1, 2001. Church & Dwight had an option to buy USA Detergents' interests in 2005, but the companies decided not to wait. "As we proceeded with the joint venture, it became clear the best way to achieve our objectives was to merge the two companies rather than wait to exercise our call option in five years," said Robert Davies III, Church & Dwight's chairman and chief executive.
Church & Dwight gained $1.25, or 5.8%, to close at $22.98 on the
New York Stock Exchange. USA Detergents finished the day up $1.03, or 18%, at $6.84 on the
Nasdaq.
