PORTLAND, Maine—Colgate-Palmolive Co. (NYSE:CL) will buy 84 percent
of natural personal care manufacturer Tom’s of Maine for $100 million in cash
and future additional share purchase opportunities. The newly acquired company will operate as stand-alone subsidiary, similar to
Colgate’s Science Diet business, and will be based on the same natural
business mottos and product formulas as it has for the last 35 years. The deal,
which will leave the founding Chappell family with 16 percent ownership, is
expected to close in second quarter.
Founded in 1970 with a phosphate-free laundry detergent, Tom’s has focused
on higher-margin oral and personal care products markets, such as toothpastes in
herbal flavors, to the tune of about $50 million in annual sales. Tom Chappell,
founder and one-time staunch critic of mainstream toothpaste makers, said
Colgate’s financial clout and distribution network will enable Tom’s brand
products to grow their potential and gain greater access to national chain
stores. “The irony is that although we are growing in the high teens and low
20s, it’s not enough to meet a demand 10 times the size,” Chappell said. “About
25 percent of Americans are interested in these kinds of products.” He noted
Tom’s brand toothpaste is now the sixth best selling brand in America, but
Colgate could help it become number three.
According to Chappell, his company, which maintains 90 products and 160
employees, will stay in Kennebunkport, Maine, and will not experience any
lay-offs due to the acquisition. “Colgate said we do not want to see synergies
at the cost of people,” said Chappell, who will also stay onboard to lead the
subsidiary. He further noted the packaging on Tom’s products, which are also
sold in Canada and the United Kingdom, will make no reference to its new
corporate owner.
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