Henkel, the German maker of Schwarzkopf shampoo and Dial soap, is about to take a deep dive into North America's laundry detergent market with a €3.2 billion ($3.6 billion) agreed deal for Sun Products Corp. of Willton, Conn.
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Henkel, whose laundry detergent brands include Persil and Purex, will add Sun Products' all, Sun and Wisk lines, along with Snuggle, the fabric softener with the cute-as-a-button tan-colored teddy bear on the bottle.
Seller Vestar Capital Partners picked up the business in 2008 for about $1.45 billion from Dutch-Anglo consumer products group Unilever. Sun Products is a holding of the New York buyout shop's Vestar Capital Partners.
Shares of Henkel were up 1.5% in Frankfurt on Friday afternoon, trading at €106.78 ($118.54), giving it a market value of around €43.5 billion. The stock held its own after falling as low as €96 as markets across Europe digested the shocking news of the U.K. referendum to leave the European Union.
For Henkel, the acquisition comes less than two months after Hans Van Bylen took the reins as CEO. He has been with the company for more than three decades, previously in Henkel's laundry and home care and beauty care businesses.
"This transaction is a major strategic move for Henkel," Van Bylen said in a statement Friday. "North America is one of the most important regions for us worldwide. With the acquisition of Sun Products, we will improve our position in the USA, the world's largest laundry care market, and Canada."
Sun Products employees around 2,000 people and has manufacturing sits in Salt Lake City and Bowling Green, Ky., along with a research and development center in Trumbull, Conn. It generated sales of around $1.6 billion in fiscal 2015.
Henkel has about 50,000 employees and reported adjusted operating profit of €2.9 billion on sales of €18.1 billion in 2015.
The latest acquisition will move the buyer closer to its goal of achieving €20 billion in 2016 sales, as declared in April by then-CEO Kasper Rorsted, due to assume duties as CEO of German sporting goods maker Adidas (ADDYY) in August.
Dan O'Connell, Vestar's founder and CEO, said in a separate announcement that Vestar is proud of Sun Products' many achievements under its ownership, including improved profitability, healthier core brands and strengthened operations. The combination with Henkel's North American business "will create a strong platform for future success," he added.
Sun Products is the second Connecticut detergent maker to strike a sale deal recently.
Phoenix Brands, a portfolio company of Lincolnshire Equity Fund IV, is set to sell its assets for $22.8 million to three buyers through a Section 363 auction in bankruptcy court. The Stamford, Conn., maker of Ajax, Fab and Dynamo detergents and Rit Dye is accepting alternative offers through July 6. Like Sun Products, Phoenix Brands acquired some of its brands from Unilever, with others coming from Colgate-Palmolive (CL) - Get Report .
--David Marcus contributed to this report.