Clorox sell­ing car-care di­vi­sion

Los Angeles Times - - Daily Market Roundup -

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.

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