Colgate to buy Sanex unit for about $940 mn

Colgate-Palmolive agreed to buy Unilever’s Sanex personal-care unit for about $940 million, pursuing its biggest purchase in more than a decade to expand in deodorant and body wash overseas.

Colgate also will sell its Colombian laundry detergent business to Unilever for $215 million, according to a statement from the New York-based company today. Sanex, which Unilever had to sell to allay European Union competition concerns, generated sales of about $260 million last year.

The acquisition is Colgate’s first since 2006 as Chief Executive Officer Ian Cook aims to expand into more profitable products. Colgate, which generates more than 80 per cent of sales outside North America, will gain a foothold in key parts of the personal-care market in Western Europe as a result of the transaction, he said.

Unilever’s disposal of Sanex “looks like a decent deal to me,” Martin Deboo, an analyst at Investec in London, said today. “They sold it for more than three times sales, which I think for a forced sale has got to be a good multiple.”

The past five years have yielded 275 deals for personal-care companies globally. The buyers in 25 of those deals paid a median of about 1.1 times their targets’ sales over that period, according to data compiled by Bloomberg. Colgate paid about $1 billion for Latin American toothpaste maker Kolynos Oral Care in 1995.

Unilever shares rose as much as 23 cents, or 1.1 per cent, to ¤21.54 and traded at ¤21.49 a share at 2.32 pm in Amsterdam. Colgate fell 8 cents to $78.35 in New York Stock Exchange composite trading.