Leading consumer products company,
Church & Dwight Co. Inc
), recently announced that it has completed the acquisition of
Avid Health Inc.
), maker of gummy vitamins and supplements, for $650 million in
The company funded the acquisition with a mix of debt including
$400 million Senior Notes at 2.875% scheduled to mature in 2022 and
commercial papers, and cash. The company added that the acquisition
will lower its projected 2012 earnings by 2 cents.
The company earlier forecasted earnings to be in the range of
$2.41 - $2.43 per share for 2012, indicating an increase of 9% -
10%, excluding charges of 9 cents related to deferred tax valuation
Also, the company added that the Avid acquisition will be
accretive to the earnings in 2013 and will boost the bottom line by
4% to 6%. Church & Dwightearlier had projected 2013 earnings in
the range of $2.73 - $2.78, up 13% - 15% year over year.
Moreover, the acquisition will expand the product categories of
the company and facilitate it to gain market share in one of the
fastest growing segments of the vitamin/mineral/supplement (VMS)
business. Avid is the market leader in gummy form VMS
business along with strong sales trend, which tripled over the last
The company expects innovative new product launches to continue
boosting organic sales in the upcoming quarters and anticipates
organic revenue growth to be at the higher end of the projected
rate of 3% - 4% in 2012.
Currently, we maintain a long-term Neutral recommendation on the
stock. Moreover, Church & Dwight, which competes with
), carries a Zacks #3 Rank, implying a short-term Hold rating.
AVID TECH INC (AVID): Free Stock Analysis
CHURCH & DWIGHT (CHD): Free Stock Analysis
CLOROX CO (CLX): Free Stock Analysis Report
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