The Hero Mighty Patch acne patch is the fastest growing treatment form in acne. It is the No. 2 brand in the acne category in the U.S. and the No. 1 patch brand in acne. The products are currently only marketed in the U.S.
The Ewing-based consumer-goods company behind brands such as Arm & Hammer and OxiClean said Mighty Patch will be a strong addition to its existing portfolio of hair and skin brands and it plans to expand Hero Mighty Patch’s limited distribution via its U.S. retailer relationships and international footprint.
The transaction, which is subject to customary closing conditions, is expected to close in the fourth quarter.
“Mighty Patch represents a powerful addition to our existing Specialty Hair and Skin portfolio, which includes Nair, Batiste, Viviscal, Flawless and Toppik,” Matthew Farrell, Church & Dwight’s CEO, stated. “The Mighty Patch brand is a problem/solution product with a strong position in a growing category. The total acne treatment category in tracked channels is approximately $700 million. The patch form has grown to 18% of the acne treatment category, as more consumers transition away from lotions and ointments to a patch solution. The brand skews towards younger consumers and consistently has a high level of brand loyalty and repeat purchase.”
Hero is a New York City-based company led by three founders. The deal is for cash along with approximately 10% of the purchase price conveyed to the founders in restricted stock.
Farrell said that the company intends to retain all Hero employees, and that the founders are expected to continue running Hero while leveraging Church & Dwight’s scale.
Hero’s trailing 12 months earnings before interest, taxes, depreciation and amortization as of June 30 was approximately $45 million, with a 40% EBITDA margin.