Church & Dwight to Acquire FLAWLESS Brand for $475 Million Plus Earn-out

EWING, N.J.--(BUSINESS WIRE)--Mar. 28, 2019-- Church & Dwight Co., Inc. (NYSE:CHD) has signed a definitive agreement with Ideavillage Products Corporation to acquire the FLAWLESS™ and FINISHING TOUCH™ brands of hair removal products (“FLAWLESS”), the market leader in women’s electric hair removal products, for approximately $475 million in cash plus an additional earn-out payment of up to a maximum of $425 million, in cash, based on a twelve-month net sales target ending no later than December 31, 2021. The transaction, which is subject to regulatory approval and other customary conditions, is expected to close in the second quarter of 2019.

FLAWLESS’ net sales for the trailing twelve months ended December 31, 2018 were approximately $180 million with EBITDA approximating $55 million (approximately 30% EBITDA margin) over the same period. FLAWLESS is the #1 women’s electric hair removal brand in the U.S. focusing on brows and face while the women’s hair removal category has historically been focused on legs with manual razors and blade products. The products are marketed in the U.S. and over 30 countries. Approximately 10% of net sales come from international markets.

“Women today are more focused on hair removal from their bodies. FLAWLESS provides simple, fast, dermatologist-approved solutions for face, brows and legs. FLAWLESS is a beloved brand by look-conscious consumers who want to be “selfie-ready” at any moment,” said Matthew T. Farrell, Church & Dwight Chief Executive Officer. “FLAWLESS represents a powerful addition to our specialty haircare portfolio which includes BATISTE dry shampoo, VIVISCAL hair thinning supplements, and TOPPIK hair fibers.”

Ideavillage is located in Wayne, New Jersey and will support the FLAWLESS business through a separate long-term services agreement with Church & Dwight. Mr. Farrell said, “Ideavillage is led by its founder and CEO, Andy Khubani, who has a passion for innovation and bringing new products to market. Having 20-years of demonstrated success in the development of multiple brands, his success with FLAWLESS stems specifically from years of work in women’s hair removal. Ideavillage is recognized for its highly skilled management team with fast decision making, rapid new product development and speed to market. We are excited to work with Andy and his team on this brand. We expect our global footprint and sales expertise to drive significant sales growth via new distribution and further expansion into international markets.”

Regarding the relationship with Church & Dwight, Mr. Khubani said, “We have found the perfect partner for our FLAWLESS brand, and for accomplishing our vision of expanding into new categories and markets. Our cultures complement one another beautifully and I’m very excited and confident in the future.”

FLAWLESS will be the Company’s 12th power brand. This acquisition meets the Company's acquisition criteria: (1) primarily #1 or #2 brands, (2) asset-light, (3) high growth and high gross margin, (4) opportunity to leverage manufacturing, logistics and purchasing, and (5) sustainable competitive advantage. The acquisition will be financed at closing with debt and is expected to be neutral to 2019 reported earnings per share, net of transition costs. During the short-term, the Company does not expect material synergies as a multi-year service agreement is in place. The Company will purchase the inventory following a transition period which is expected to be completed by end of 2019.

Mr. Farrell said, “In 2019, we continue to expect approximately 7-9% adjusted EPS growth driven by approximately 7-9% EPS growth of our existing business, plus 1% accretion from the FLAWLESS acquisition inclusive of interest expense and intangible amortization, less 1% one-time transition costs. The earn-out liability is required to be adjusted quarterly during the earn-out period. This non-cash quarterly adjustment will be included in the Company’s reported results, but is excluded from the Company’s EPS outlook. The acquisition is expected to increase 2019 cash earnings by 4%.”

BofA Merrill Lynch is acting as exclusive financial advisor to Church & Dwight in this transaction.

Church & Dwight Co., Inc. will host a conference call to discuss the acquisition on March 28, 2019, at 10:00 a.m. (ET). To participate, dial 877-322-9846, access code: 3478918 (International: 631-291-4539, same access code: 3478918). You can also participate by visiting the Investor Relations section of the Company’s website at

This press release contains forward-looking statements, including, among others, statements relating to the consummation, financing and impact of the FLAWLESS acquisition and anticipated associated cost savings; net sales and earnings growth; earn-out payments; earnings per share; cost savings programs; and consumer demand and spending. These statements represent the intentions, plans, expectations and beliefs of the Company, and are based on assumptions that the Company believes are reasonable but may prove to be incorrect. In addition, these statements are subject to risks, uncertainties and other factors, many of which are outside the Company’s control and could cause actual results to differ materially from such forward-looking statements. Uncertainties include assumptions as to market growth and consumer demand. Factors that could cause such differences include, without limitation, the risk that Flawless will not be integrated successfully, the risk that the cost savings from the transaction will not be fully realized or will take longer to realize than expected, and the ability of management to execute its plans with respect to the Company’s initiatives.

For a description of additional factors that could cause actual results to differ materially from the forward-looking statements, please see the Company’s quarterly and annual reports filed with the SEC, including Item 1A, “Risk Factors” in the Company’s annual report on Form 10-K. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the U.S. federal securities laws. You are advised, however, to consult any further disclosures the Company makes on related subjects in its filings with the SEC.

This press release also contains non-GAAP financial information. The non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP financial measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded.

Non-GAAP information:

Adjusted EPS:

This press release presents adjusted EPS, namely, earnings per share calculated in accordance with GAAP, as adjusted to exclude significant one-time items (adjustments to the earn-out liability) that are not indicative of the Company’s period to period performance. We believe that this metric provides investors a useful perspective of underlying business trends and results and provides useful supplemental information regarding our year over year earnings per share growth.


This press release also presents the trailing twelve month EBITDA and EBITDA margin for FLAWLESS. EBITDA is a non-GAAP financial term and represents earnings before interest, taxes, depreciation and amortization. Management believes the presentation of EBITDA and EBITDA margin provides useful additional information to investors about trends in the company's operations.

Source: Church & Dwight Co., Inc.

Rick Dierker
Chief Financial Officer