Clorox selling car-care division
oakland —Clorox Co. has agreed to sell the division that makes car-care brands such as Armor All and STP to a private-equity firm for $780 million in cash.
The company announced the deal Tuesday with Avista Capital Partners. The private-equity firm would get the wellknown brands, sold primarily in the U.S., Australia, Canada and Europe.
Clorox had announced in May that it was exploring options for the business, which had $300 million in sales last year — about 5% of total revenue.
Clorox makes its namesake cleaning products as well as Fresh Step cat litter, Kingsford charcoal and Hidden Valley Ranch salad dressing. The company, based in Oakland, had said at the time it wanted to focus more on those businesses.
The deal is subject to regulatory and other approvals and is expected to close by the end of the year.
Clorox said it expected the deal to cut earnings by about 20 to 25 cents a share in the current fiscal year.
The company plans to update its fiscal 2011 financial outlook when it reports first-quarter results in early November.
Clorox expects to use net proceeds from the sale to buy back shares.
Jefferies & Co. analyst Douglas M. Lane said the brands are profitable and have strong market share. He told clients in a note Monday that the sale made sense for Clorox’s strategy of focusing on health and wellness and sustainability, all important to shoppers now.