Clorox (CLX) is best known for its namesake liquid bleach, Glad garbage bags, and Brita water filters. But now the consumer products giant is taking aim at a whole new market: digestive health.
On Tuesday Clorox said it has bought Renew Life, a $115 million-a-year digestive supplement brand with a heavy focus on probiotics to take advantage of a booming but “highly fragmented” $10 billion market that is growing 7% a year. Within that, probiotics are a $1.3 billion product category expected by analysts to grow 15% a year.
“The Renew Life acquisition is consistent with our strategy to accelerate growth through bolt-on acquisitions of leading brands into fast-growing categories with attractive margins,” Clorox CEO Benno Dorer said in a statement.
Clorox, whose many other brands include Liquid Plumr and Burt’s Bees, said Renew Life would add about 2% to its annual sales. The company also has a sizable business serving hospitals and other health care facilities.
The news came as Clorox, which competes with the likes of Procter & Gamble (PG) and Colgate Palmolive (CL), reported strong quarterly results.
The company raised its full-year earnings forecast to a range of $4.85 to $4.95 a share from $4.75 to $4.90. It now expects sale to grow 1% to 2%, rather than range from flat to rising 1%. Its gross profit margin rose to 45.3% in its most recent quarter from 43.2% a year before, helped by favorable commodity costs, cost savings, and price increases.
Excluding discontinued operations, Clorox, which last year exited the once important market of Venezuela, had earnings of $159 million, or $1.21 a share, above the $1.11 a share analysts were expecting, according to Thomson Reuters. Revenue rose to $1.43 billion in the quarter.