Church & Dwight Buys Orange Glo for $325 Million

Maker of Oxi Clean and Other Household Cleaners Is a Master of DRTV

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CINCINNATI (AdAge.com) -- High-volume direct-response pitchman Billy Mays will soon have a new boss: Church & Dwight Co. has agreed to buy household-cleaning upstart Orange Glo International for $325 million.
Key to the deal is Oxi Clean, which brought in about two-thirds of parent Orange Glo's $200 million in sales last year.
Key to the deal is Oxi Clean, which brought in about two-thirds of parent Orange Glo's $200 million in sales last year.

Key to the deal is Oxi Clean, which Church & Dwight said is the No. 2 brand in the $1 billion U.S. laundry-additives category (behind No. 1 Clorox). Oxi Clean is the No. 1 pre-wash laundry additive.

Total sales for Orange Glo, which also includes the eponymous household cleaner and Kaboom cleaner, were just under $200 million for the 2005 calendar year -- about two-thirds of that sum came from Oxi Clean, said C&D CEO James Craigie in a conference call this morning.

'Oxi clone' knockoffs
At one point in 2002, Orange Glo sales exceeded $300 million, according to people familiar with the company. But sales fell in 2003 and 2004 as competitors such as Clorox Co., SC Johnson and Reckitt Benckiser piled into the market with their own "oxi clone" knockoffs.

C&D Chief Financial Officer Zvi Eiref acknowledged that Orange Glo had "an up-and-down period," but added: "It's a testament to the strength of the [Oxi Clean] brand that they were able to withstand that and remain as a leading player in the pre-wash additive category." Mr. Craigie said Oxi Clean has grown at a double-digit pace for the past year.

Mr. Mays' gig appears safe under new ownership. "We not only intend to keep [Orange Glo's direct-response advertising] but we intend to see if we can apply the same kind of advertising to other Church & Dwight products and brands," Mr. Craigie said.

Orange Glo signed Mr. Mays, easily the most visible pitchman in direct-response TV, to an exclusive contract at one point in 2003 near the height of the product's success. But as the company pulled back some on advertising, Mr. Mays was set free to hawk other direct-response products in recent years.

Spent $19.1 million last year
Orange Glo has worked with a variety of direct-response shops over the years, relying mainly on Sullivan Productions, Tampa, Fla., for creative and Icon Media Direct, Van Nuys, Calif., for DRTV media. Orange Glo spent $19.1 million on media last year, according to TNS Media Intelligence.

Though Orange Glo briefly dabbled in conventional TV advertising in 2002 and 2003 via McClain Finlon, Denver, and Interpublic Group of Cos.' Campbell-Mithun, Minneapolis, the company quickly returned to the direct-response model.

Orange Glo's success on direct-response TV has prompted competitors -- including Procter & Gamble Co. and Clorox -- to adopt DRTV, too. P&G's direct-response advertising has grown to the point that it named its first DRTV media agency of record, Quigley-Simpson Brand Response Advertising, Los Angeles, earlier this year for an account estimated at up to $100 million.

The acquisition comes amid what Orange Glo executives and representatives have billed as Oxi Clean's biggest product launch ever -- a detergent ball that ships to retailers next month after starting on DRTV this winter. The softball-size detergent tab in a mesh holder can be used through about 25 wash cycles and expands the brand into the $6 billion-plus laundry-detergent category.

Mr. Craigie said that some administrative functions of Orange Glo will be consolidated with Church & Dwight, but that Orange Glo's Denver-area office as well as its marketing and research-and-development staffs will remain in place and that he will continue to work with the founding Appel family, including Chairman and Founder David Appel and CEO Joel Appel.

'Pure and natural'
Though Oxi Clean has been marketed primarily based on performance, Mr. Craigie noted that it also has a "pure and natural" positioning he compared to C&D's Arm & Hammer, one that he believes gives it an edge on rival Clorox. He said chlorine bleach is viewed by consumers as "very harsh."

Oxi Clean has been a longtime favorite of Wal-Mart Stores, whose backing helped propel the brand to national distribution, and the brand stands to gain more ground under Wal-Mart's environmental-sustainability movement. Mr. Craigie said Oxi Clean also has considerable strength in club stores, where Church & Dwight is relatively weak.
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