|Annual sales of of the group of brands being sold is estimated at around $100 million.
COLGATE-PALMOLIVE TO CUT 4,400 JOBS, CONSOLIDATE MEDIA BUYING
Marketing Giant Announces Sweeping Reorganization
Fab, Dynamo, Ajax
The deal includes Fab, Dynamo, Arctic Power, ABC, Cold Power and Fresh Start as well as the license of the Ajax brand for laundry in the U.S., Canada and Puerto Rico, according to the company. Colgate did not disclose the sales price but said the sale, expected to close this fall, should generate an after-tax gain of $60 million.
Colgate will use the gain to offset about $50 million in restructuring charges and a one-time tax hit of about $35 million for repatriating about $800 million in overseas earnings, the company said. The brands had sales of $87.6 million last year, according to figures from Information Resources Inc. reported by Deutsche Bank, which estimated in a note today that total brand sales are around $100 million.
Plummeting market share
Colgate’s laundry-detergent market shares fell by more than half over the past 10 years as Colgate managed them for profit margin. In the 1990s, the company outsourced all production, ended all media support and conceded laundry detergent to industry heavyweight Procter & Gamble Co. as it concentrated on oral and personal care and pet food.
Colgate has been shopping the brands for more than two years, according to people familiar with the matter. The detergent brands did not have agency assignments. WPP Group’s Young & Rubicam, New York, handles other Colgate brands.