Unilever Buys Seventh Generation -- WSJ
September 20 2016 - 3:03AM
Dow Jones News
By Saabira Chaudhuri and Sharon Terlep
LONDON -- Unilever PLC is getting into the market for "natural"
cleaning products with a deal to buy Seventh Generation Inc., a
maker of plant-based detergents and household cleaners.
The European consumer products giant behind Dove soaps and Axe
body sprays agreed to pay roughly $700 million for Seventh
Generation, a person familiar with the terms said.
The deal gives Unilever a foothold in the U.S. market for
diapers and tampons in addition to detergents and hand soap,
traditionally strongholds of rival Procter & Gamble Co.
The Wall Street Journal recently reported that Unilever was in
early-stage talks to buy Honest Co., the consumer-products retailer
co-founded by actress Jessica Alba that claims to avoid using harsh
chemicals. That deal, which would have set Unilever back by more
than $1 billion according to people familiar with the talks, is now
unlikely.
Seventh Generation, founded in 1988, had sales of more than $200
million last year, according to Unilever. The Vermont-based
company's valuation has soared in the last decade. An investment
deal in 2007 put the company's value at around $100 million at the
time.
"We look at this as having a multiplier effect for our
business," said Seventh Generation Chief Executive John Replogle,
who will stay on to run the company. "We always aspired to be a
billion-dollar brand. We see this as a springboard as opposed to
throwing in the towel."
Seventh Generation shareholders include its management,
private-investment funds as well as Catamount Ventures, a San
Francisco venture-capital firm, and Generation Investment
Management LLP, a London-based fund founded by former Vice
President Al Gore.
Mr. Replogle said the idea for a deal came from a meeting he had
in January with Nitin Paranjpe, president of Unilever's Home Care
business at chain drugstore conference in Florida. The company saw
Unilever as a good fit given the company's years'-long emphasis on
reducing its environmental impact, he said.
The Seventh Generation deal comes weeks after Unilever acquired
Dollar Shave Club for about $1 billion. The fast-growing but
unprofitable startup provides a mail-order service that ships
disposable razors for a flat monthly fee that has challenged
P&G's Gillette business.
For Unilever, it is a return to the detergent business. The
company sold its North American laundry detergent business, which
included the All and Snuggle brands, for $1.45 billion to a
private-equity firm in 2008. That business was recently acquired by
another rival, Henkel AG.
"This addition to Unilever's product portfolio will help us meet
rising demand for high-quality products with a purpose," said
Unilever's Mr. Paranjpe.
--Serena Ng contributed to this article.
Corrections & Amplifications: Unilever in August paid $1
billion to acquire Dollar Shave Club. An earlier version of this
article incorrectly stated the timing of that acquisition. (Sept.
19)
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com and
Sharon Terlep at sharon.terlep@wsj.com
(END) Dow Jones Newswires
September 20, 2016 02:48 ET (06:48 GMT)
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