Church & Dwight acquires TheraBreath brand for $580M

Baking soda maker Church & Dwight Co. said Monday that it will acquire the TheraBreath brand for $580 million in cash. The transaction is expected to close in the fourth quarter.

TheraBreath is the No. 2 brand in the alcohol-free mouthwash category in the U.S..

According to terms of the agreement, the acquisition contains the benefit of a cash tax shield valued at $85 million. Net of the tax shield, the deal is a $495 million acquisition, or a 13.7x multiple paid (based on $36 million of 2022 run rate EBITDA).

The company expects to finance the acquisition with debt.

“Oral care is important to us strategically,” said Matthew Farrell, Ewing-based Church & Dwight’s CEO. “We are excited about adding the company’s 14th power brand. This acquisition meets the company’s long-standing acquisition criteria: (1) No. 1 or No. 2 brand in a category; (2) asset-light; (3) a growing brand; and (4) expected to be gross margin accretive to the company. Acquisitions have been a key driver of Church & Dwight’s consistently strong shareholder returns.”

Church & Dwight said the acquisition represents a powerful addition to its existing oral care portfolio, which includes Arm & Hammer toothpaste, Spinbrush battery-operated toothbrushes, Oragel oral analgesics and Waterpik water flossers.

Centerview Partners LLC acted as financial adviser to Church & Dwight and Proskauer Rose LLP acted as legal adviser. The seller was advised by Financo Raymond James as exclusive financial adviser and Sidley Austin LLP as legal adviser.