Pays $100 Million for 84% of Natural Toothpaste Brand

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CINCINNATI ( -- Colgate-Palmolive Co. today announced it has bought a majority stake in Tom’s of Maine, the leading natural toothpaste brand, cementing the company’s hold on leadership in U.S. toothpaste as it also moves into a new segment.
Tom's of Maine had a 60% share of the natural oral-care market in the U.S.

Annual sales
Colgate will pay founders Tom and Kate Chappell $100 million for an 84% stake in the company, which Colgate said has a 60% share of the natural oral-care segment in the U.S. Sales were not disclosed, but Deutsche Bank analyst William Schmitz pegged Tom’s sales at $40 million to $50 million annually.

The deal, which remains subject to regulatory approvals and other conditions, is part of Colgate’s strategy to focus on higher-margin oral- and personal-care businesses and tap into an overall $3 billion market for natural oral- and personal-care products in the U.S., the company said. It comes as Chairman-CEO Reuben Mark prepares to pass the CEO post to Chief Operating Officer Ian Cook early next year.

Expected to grow rapidly
Natural products are expected to grow rapidly over the next five years, particularly in skin care, Mr. Schmitz said in a research note, “but Tom’s big gains likely [are] over as [the] company has substantial mass-channel distribution.”

WPP Group’s Y&R Advertising, New York, handles Colgate creative; sibling Mediaedge:cia handles media buying.

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