The Clorox Company announced that it has entered into a definitive agreement to acquire Nutranext, a health and wellness company based in Sunrise, Florida.
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Nutranext manufactures and markets leading dietary supplement brands in the retail and e-commerce channels as well as in its direct-to-consumer business.
Nutranext's products include multivitamins under the Rainbow Light® brand, the No. 2 vitamin brand in the natural channel1; specialty minerals under the Natural Vitality brand, the No. 1 anti-stress and sleep brand in the natural channel2; and supplements for hair, skin and nails under the Neocell brand.
The company also manufactures and markets multivitamins and specialty minerals through its direct-to-consumer business, primarily under the Stop Aging Now® brand. About 90 percent of Nutranext sales are in the U.S.
The Nutranext acquisition brings significant scale and breadth to Clorox's dietary supplements business. It follows the company's May 2016 acquisition of the RenewLife brand, a leader in digestive health.
Clorox's brand-building capabilities and retail execution behind the RenewLife brand have led to strong growth in the e-commerce channel and expanded distribution in the retail channel.
In calendar year 2017, Nutranext generated sales of about $200 million. Clorox will pay $700 million to acquire Nutranext, with the purchase price representing about 3.5 times calendar year 2017 sales.
The company expects to fund the transaction through a combination of available cash and debt financing, while maintaining a Debt/EBITDA ratio within its target range of 2.0x to 2.5x.
The transaction is subject to certain closing conditions, including customary regulatory approvals, and is expected to close in the company's fiscal fourth quarter, which ends June 30, 2018.
Clorox's preliminary estimates indicate the acquisition will dilute earnings per share by 7-11 cents in the fourth quarter of its current fiscal year, ending June 30, 2018, and by 8-12 cents in fiscal year 2019 and be accretive to earnings per share in fiscal year 2020.
All estimates are based on U.S. GAAP. These estimates include the impacts from financing costs, inventory step-up charges, one-time systems and other integration expenses and intangible amortization expenses.
Clorox plans to update investors on the anticipated financial impact of the Nutranext acquisition in its third-quarter earnings press release to be issued in early May 2018. ■