Filorga Laboratories. (Image via Retail.ru)

Colgate Dental Care to buy French Skin Care Business for $1.69 Billion

Colgate parent company finally had a deal to buy skin care unit of French Filorga Cosmétiques for US$1.69 billion, as said on Thursday (7/11).

The transaction was financed with a combination of debt and cash, the company said.

Through the acquisition, Colgate which is long known for its dental care products ranging from toothpaste, toothbrush, and mouthwash will diversify its business into more personal care interests. Filorga will be merged into some of Colgate’s brands, including Ajax cleaner, Speed Stick, and Softsoap.

The move is launched under the leadership of new chief executive Noel Wallace, who is seen to be more aggressive than his predecessor Ian Cook. With a US$63.4 billion market capitalization and US$15.5 billion in annual sales, Wallace wants to take on the big chance to reshape the portfolio of Colgate which has been historically run very conservatively to sell dental care.

He said the acquisition will also pave the way for the company to enter the fast-growing and sizeable travel retail channel, especially in Asia—which means to be high growth and profitability.

However, this is not expected to affect earnings per share in 2019.

Filorga Cosmétiques is anti-aging skin care products based in Paris. The company sells its facial products in more than 60 countries, with the largest markets in France, Spain, Italy, and China.

The sales making Filorga has distinctive positioning that fits well with Colgate’s long-term personal-care growth strategy.

Source: https://www.ft.com/content/30b2eaec-a42e-11e9-974c-ad1c6ab5efd1