Carter Wallace sale to Armkel cleared – Armkel to gain condom brands Trojan and Natural Lamb and pregnancy/ovulation test kits First Response and Answer – Brief Article

Carter Wallace sale to Armkel cleared – Armkel to gain condom brands Trojan and Natural Lamb and pregnancy/ovulation test kits First Response and Answer – Brief Article – Statistical Data Included

Michael Johnsen

CRANBURY, N.J. — Carter Wallace shareholders last month approved the sale of the company’s consumer brands for $739 million to Armkel, a joint venture between Church & Dwight and investment firm Kelfo. As part of the deal, Armkel gains control of condom brands Trojan and Natural Lamb and pregnancy/ovulation test kits First Response and Answer.

According to Church & Dwight executives, who cited ACNielsen data, Trojans and Natural Lamb condoms held a 68.6 percent share of the U.S. market in 2000, making it the No. 1 condom manufacturer. In addition, the company gained the No. 2 position in test kits with a 16.2 percent share of pregnancy testers and a 27.6 percent share of ovulation testers.

Consumer brands Arrid and Lady’s Choice (both antiperspirants), Nair (depilatory) and Pearl Drops (oral care) also were part of the deal.

Carter Wallace shareholders received $20.44 per share in the buyout. The company’s healthcare business was sold to a group consisting of MedPoint Capital Partners, the Carlyle Group and the Cypress Group for $408 million.

However, the move was opposed by at least one key former Carter Wallace shareholder–Mario Gabelli, manager of the investment advisory firm Gabelli Asset Management, which owned 27.2 percent of the company (some 9.1 million shares). “We believe that the management of Carter Wallace is selling the company out from under the shareholders at a price substantially below its intrinsic value,” he wrote in a letter to shareholders.

One retail executive surmised that the deal could hurt Trojan sales in the short run. “Carter handled the line as a direct selling force at most drug chains, whereas Church & Dwight is handled through the broker community. You will lose some expertise in the condom business when you go from direct to broker.”

This retail executive noted that Church & Dwight probably will concentrate heaviest on condom sales because it is this segment that represents the strongest growth area of all of the former Carter Wallace’s brands.

Church & Dwight officials could not be reached for comment about whether it would use a direct sales force. During a recent presentation, however, executives noted that the condom category has “high growth potential.”

COPYRIGHT 2001 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.

COPYRIGHT 2001 Gale Group