The world's leading consumer goods and household product
manufacturer
Procter & Gamble Co.
(
PG
) recently completed the divestiture of its PUR water purification
products business to
Helen of Troy Limited
(
HELE
). However, the terms of the transaction were not disclosed.
Despite disposing the PUR business P&G retained the corporate
philanthropic program associated with the business and rebranded it
with the corporate logo, "P&G Purifier of Water".
In the growing water purification category, PUR is a well known
name that sells and markets a variety of high-quality water
filtration products. The PUR products include faucet mount systems
and filters, pitcher systems and filters, and refrigerator filters,
and are available throughout the United States.
El Paso, Texas based Helen of Troy had previously signed a
definitive agreement with P&G to acquire all the assets of the
PUR business in early December, 2011. Helen of Troy expects the
newly acquired business to record sales of $110 million in
2012. The company also expects the business to be accretive to its
earnings immediately.
Helen of Troy plans to integrate the PUR business with its
Healthcare/Home Environment segment. The segment sells branded
health care devices such as thermometers, humidifiers and heating
pads, and small domestic appliances such as air purifiers, portable
heaters, fans, and bug zappers.
As per the newspaper Advertising Age, the market for water
purifier, which is currently dominated in the U.S. by
The Clorox Company's
(
CLX
) Brita brand, is expected to grow considerably both in the U.S.
and globally. Moreover,
Unilever Plc.
(
UL
) has set a target of providing safe drinking water to 500 million
people by 2020 with its PureIt water-filtration brand.
P&G, the parent company of well-known consumer brands like
Tide, Downy, Pampers and Crest, acquired the water filtration
systems, PUR from water purifier manufacturer Recovery Engineering
Inc.
However, the retail giant decided to sell the business as it
perceived that the water purification business was not core to its
long-term strategy. Tom Finn, the president of P&G, stated that
with the disposition of the PUR business, the company can better
focus on its core businesses going forward.
However, P&G has not parted with the water purification
technology that drives its Children's Safe Drinking Water Program.
The powder product and patents used in that program will remain
with P&G.
The product is a packet of powder developed by P&G in
collaboration with the U.S. Centers for Disease Control and
Prevention (CDC). The powder is distributed through the Children's
Safe Drinking Water Program. The product is capable of purifying
water anywhere in a simpler, more affordable and convenient way.
The team also provides the product to the governments in need at
no-profit basis.
Currently, we prefer to be Neutral on P&G. Furthermore,
P&G holds a Zacks #3 Rank, which translates into a
short-term 'Hold' rating.
CLOROX CO (
CLX
): Free Stock Analysis Report
HELEN OF TROY (
HELE
): Free Stock Analysis Report
PROCTER & GAMBL (
PG
): Free Stock Analysis Report
UNILEVER PLC (
UL
): Free Stock Analysis Report
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