Godrej buys Colgate-Palmolive female deodorant brand in UK
Godrej Consumer Products (GCPL), which makes Cinthol soaps and Good Knight mosquito repellents, has acquired female deodorant brand Soft & Gentle from Colgate-Palmolive in the United Kingdom for an undisclosed sum, the latest in its string of international acquisitions.
The acquisition, which is made by the company's UK subsidiary Keyline Brands, is expected to be accretive in year one. It is being funded by low-cost debt and the impact on GCPL's consolidated debt/equity ratio is 0.03, GCPL said in a notice to the exchanges.
The brand Soft & Gentle clocked in sales of £21 million in 2011. The brand is Britain's fourth-largest female deodorant brand by market share and retains a strong brand equity with retailers and consumers, the company said.
GCPL is also working on changing its mix in the UK towards owned brands. Historically, the company has had a higher mix of distributed brands than owned brands in the UK.
"With the Soft & Gentle acquisition, the salience of owned brands will become greater than that of distributed brands. The acquisition of Soft & Gentle by Keyline Brands will add profitable scale to our UK business," said Adi Godrej, chairman.
GCPL share was down marginally on the BSE on Tuesday to close at R721.65.
GCPL gets about 42% of its revenue from its international business helped by the acquisitions it made over the past few years, as it looks to become a strong player in the emerging markets.
In January last year, the company said it will acquire a hair colour and cosmetics company in Chile. Prior to that, it made purchases in Africa and Indonesia. During the last quarter, the company's international market grew 31% organically.
"I am optimistic that our UK business will continue to outperform the market. For the Keyline business, we look to selectively bolt on brands that are strategic, financially accretive and provide significant synergies," said Godrej. Established in 1990 in the UK, the acquirer — Keyline Brand — was acquired by GCPL in October 2005. It operates in the household and personal care space.