Church & Dwight Buying TheraBreath

Church & Dwight will acquire the TheraBreath mouthwash brand in $580 million cash deal.

TheraBreath’s net sales were around $86 million in the October 2020 through September 2021 period, according to Church & Dwight, which plans to leverage its distribution network, manufacturing footprint, and operating expertise for an estimated $6 million in run rate operating synergies by 2023.

Church & Dwight projected TheraBreath’s annual net sales to grow approximately 15% to $100 million in 2022, with adjusted EBITDA expected to be $36 million, including $4 million of synergies.

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TheraBreath is the No. 2 brand in the alcohol-free mouthwash category in the United States. International represents less than 10% of net sales, and its new owners plan to grow distribution through its international footprint.

Matthew Farrell, Church & Dwight CEO, said the oral category is an important one for the company, noting the new brand will add to its existing portfolio that includes Arm & Hammer, Spinbrush, Orajel and Waterpik.

The company has four stated criteria when it comes to acquisitions:

1. It must be the No. 1 or No. 2 brand in a category.

2. It must be asset-light.

3. It must be a growing brand.

4. It must be expected to be gross margin accretive to the company.

“The TheraBreath brand is a problem/solution product and one of the fastest growing brands in the mouthwash category,” he added. “This acquisition gives Church and Dwight a strong position in a growing category with tailwinds as the brand skews towards younger consumers and consistently has a high level of brand loyalty and repeat purchase.”

The deal is expected to close in the fourth quarter.