Clorox Buys Burt’s Bees for $913M

  • Date of closing: Nov. 30, 2007
  • Value of deal at closing: $913 million
  • Attorneys: Morrison & Foerster of San Francisco (Clorox); Fried, Frank, Harris, * Shriver & Jacobson of New York and Wyrick Robbins Yates & Ponton of Raleigh (Burt’s Bees).
  • Investment banks: Lehman Brothers acted as sole financial advisor to Clorox. Goldman Sachs advised Burt’s Bees.

DURHAM – There’s no question which Triangle deal produced the loudest buzz last year: Clorox’ announcement that it would pay more than $900 million to purchase Durham-based personal care products company Burt’s Bees.

That’s not too shabby a price tag for a spunky firm originally founded in 1984 by graphic designer Roxanne Quimby and beekeeper Burt Shavitz in the wilds of Maine. Neither Quimby nor Shavitz are with the company any longer, but their successors managed to put together one sweet deal for AEA Investors.

That private equity firm bought 80 percent of Burt’s Bees for $179 million in 2004, with Quimby keeping the remaining 20 percent. Both she and AEA Investors decided to cash out in the fall of 2007, with the deal formally being announced at the end of October. At the time, the transaction was valued at $925 million. The closing price of $913 million excluded $25 million of tax benefits associated with the deal.

Oakland, Calif.-based Clorox paid for the all-cash deal with both cash and short-term borrowing. After having a couple of months to poke under the hood of its new acquisition, Clorox executives haven’t expressed any buyer’s remorse.

“The transition has been smooth and (there’s) a tremendous amount of excitement around this business,” Clorox North America Chief Operating Officer Larry Peiros said in a recent conference call. He said Burt’s Bees’ sales grew 23 percent in the most recent reported quarter.

Chairman and CEO Donald R. Knauss said there are no plans to integrate Burt’s Bees into Clorox, preferring the two firms work together “where it makes sense.”

Clorox was attracted by Burt’s Bees all-natural products. The Durham firm’s products are, on average, 99 percent natural and more than half of them are completely natural.

Future plans include a new print advertising campaign for Burt’s Bees set to begin in February. Several new products are headed to store shelves.

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