The Clorox Company announces that it has acquired Aplicare, Inc. and HealthLink, leading providers of infection control products for the healthcare industry. These acquisitions are important steps in the companys 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 healthcare portfolio of Clorox Professional Products Company, a division of The Clorox Company.
One element of our strategy is making targeted, strategic acquisitions to drive faster growth, says 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 companys commitment to meet the unique needs of the healthcare industry, where the use of infection control products is growing rapidly in response to increased attention on helping prevent healthcare-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 healthcare facilities.
We can greatly benefit from Aplicares 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, says Craig Stevenson, vice president and general manager of Clorox Professional Products Company.
HealthLink, based in Jacksonville, Fla., bundles a wide assortment of products including AloeGuard® antimicrobial hand soap for use by individual physicians, doctors offices, outpatient care centers and other healthcare facilities.
HealthLink has a broad portfolio of infection prevention products and strong relationships with the major healthcare product distributors who represent their products to thousands of health care sites across the U.S., Stevenson adds.
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 Cloroxs dividend policy or plans to repurchase shares using the remaining proceeds from the sale of the companys 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 healthcare-associated infection at any given time, and these infections are responsible for approximately $28 billion to $33 billion in preventable healthcare 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 says.
The transactions closed during the last week of December 2011.