MidOcean Partners has signed an agreement to sell Water Pik to publicly traded Church & Dwight Co. (NYSE: CHD) for approximately $1 billion in cash. The transaction is expected to close in the third quarter of 2017.
Water Pik is the market leader in both its oral health and replacement showerhead business segments. The company’s branded oral health business sells a complete line of products, including water flossers, a water flosser and powered toothbrush combination product line, and a full line of professional dental products. Water Pik’s replacement showerhead business sells its products under the EcoFlow (water conservation) and EasySelect (adjustable in-handle water pressure and spray selection) brands. Water Pik’s products are sold through retailers, wholesalers, contractors, and online through Water Pik’s e- commerce store. Water Pik was founded in 1962 (the company was originally known as Aqua Tec Corp.) by hydraulic engineer John Mattingly and dentist Gerald Moyer. Today the company is led by President and CEO Richard Bisson and is headquartered in Fort Collins, CO (www.waterpik.com).
“MidOcean was a valuable partner and I am very proud of what we accomplished together during our partnership,” said Mr. Bisson. “With extensive experience in the branded consumer space, MidOcean provided us with sound strategic guidance and support that allowed us to scale the company, generate outstanding growth, introduce new and innovative products, and further position Water Pik as a leader in the branded oral health and replacement showerhead business.”
Waterpik’s net sales for the trailing twelve months through June 30, 2017 were approximately $265 million and trailing twelve months EBITDA was approximately $80 million, a 30% EBITDA margin. This calculates to an exit multiple of 12.5x for Mid Ocean and its partners. Once the business is fully integrated, Church & Dwight expects to achieve an estimated $10 million in operating synergies by 2019.
MidOcean, Vulcan Capital and Northwestern Mutual acquired Water Pik in July 2013. During the term of ownership, Water Pik generated significant organic growth in both revenue and EBITDA and greatly increased its Water Flosser market penetration in North America. These gains were achieved through new product development; greater marketing efforts in the professional dental segment; the launch of a Water Flosser direct response television (DRTV) campaign; and international expansion.
“Water Pik’s accomplishments during our partnership are representative of the value creation we look to drive and actively support in our portfolio companies. Building upon Water Pik’s leading market position, MidOcean was able to apply its proven methodologies and sector expertise to bolster a key player in a growing and increasingly important oral health and shower head businesses,” said Jonathan Marlow, Managing Director at MidOcean.
MidOcean invests in middle market companies active in the business and consumer services sectors. The firm was founded in 2003 and is based in New York (www.midoceanpartners.com).
Church & Dwight Co. (NYSE: CHD), the buyer of Water Pik, is a producer and marketer of personal care, household and specialty products under the Arm & Hammer, Orajel, Nair, First Response, OxiClean, and Brillo brand names. The company was founded in 1847 and had $3.5 billion of revenue in 2016. The company is based near Philadelphia in Ewing, NJ (www.churchdwight.com).
Harris Williams and Wells Fargo acted as financial advisors, and Kirkland & Ellis acted as legal advisor to MidOcean Partners.
© 2017 Private Equity Professional | July 18, 2017
