Clorox Picks Up Burt's Bees

Clorox (CLX Quote - Cramer on CLX - Stock Picks) is looking to add some buzz to its product lineup.

The consumer-products maker agreed to buy Burt's Bee's, a maker of natural personal-care and beauty products, for $925 million cash. For Clorox -- whose products include its namesake cleaner, Glad trash bags and Hidden Valley salad dressing -- the deal marks its first foray into the personal-care space.

Clorox said the purchase aligns with its strategy of seeking growth from consumer "megatrends" in health and wellness, sustainability and convenience.

Burt's Bees makes more than 150 "earth-friendly" personal care products, with items like Beeswax Lip Balm and Orange Essence Facial Cleanser. It's estimated to have about $170 million in customer sales in 2007.

"Burt's Bees is a compelling strategic fit for us, and we believe we can expand on its strong trends over time to build even greater value," said Beth Springer, Clorox's executive vice president of strategy and growth. "Burt's Bees has a highly effective strategy and plan, strong trade practices and organizational capabilities, and a robust culture and esprit de corps that we want to leverage and protect."

Clorox expects the deal to cut its earnings by 10 cents to 15 cents a share this fiscal year, and be slightly accretive in fiscal 2009.

Clorox also reported that its fiscal first-quarter profit was roughly flat with a year ago. Earnings for the period ended Sept. 30 slipped to $111 million from $112 million a year earlier. Earnings per share rose to 76 cents from 73 cents due to fewer shares outstanding.

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