Bleach and household products-maker Clorox Co. said March 12 that it has agreed to buy health and wellness company Nutranext, a retailer of dietary supplement brands.
The household goods manufacturer will pay $700 million for the acquisition. The amount represents about 3.5 times Nutranext's sales of $200 million in calendar year 2017.
Clorox said it estimates that the deal will dilute its GAAP earnings per share by 7 cents to 11 cents in the fourth quarter of fiscal 2018, which ends June 30. S&P Capital IQ has a fourth-quarter analyst consensus forecast of $1.68 GAAP EPS for Clorox. Clorox said it expects the deal to dilute its fiscal 2019 GAAP EPS by 8 cents to 12 cents and be accretive to its fiscal 2020 GAAP EPS.
Clorox said these estimates include the effect of financing costs, inventory step-up charges, other integration expenses and intangible amortization expenses. The company said it plans to update investors on the financial impact of the Nutranext deal when it releases third-quarter earnings in early May 2018.
The purchase expands Clorox's health and wellness portfolio and follows its acquisition of digestive health supplements brand RenewLife in May 2016. Nutranext's supplements include the Rainbow Light brand of vitamins and the anti-stress minerals brand Natural Vitality.
According to Clorox Chairman and CEO Benno Dorer, the Nutranext deal is in line with the company's strategy to acquire brands in fast-growing categories.
Clorox will fund the deal via a combination of available cash and debt financing, the company said. It said it expects to maintain a debt-to-EBITDA ratio within its target range of 2 times to 2.5 times.
The Oakland, Calif.-based company said it expects to complete the purchase in the fourth quarter of fiscal 2018.
The transaction is subject to the customary closing conditions and regulatory approvals.
