Church & Dwight to Acquire Hero

On Sep 6, 2022

Ewing-based Church & Dwight Co., Inc. has signed a definitive agreement to acquire the Hero Mighty Patch^® brand (Hero) and other acne treatment products for $630 million, consisting of cash and Church & Dwight restricted stock. Mighty Patch^® is the No. 2 brand in the acne category in the US and the No. 1 patch brand in acne. The transaction, which is subject to customary closing conditions, is expected to close in the fourth quarter.

Hero’s net sales for the trailing 12 months through June 30, 2022 were approximately $115 million. The acne patch is the fastest growing treatment form in acne. The products are currently only marketed in the US.

“Mighty Patch^® represents a powerful addition to our existing Specialty Hair and Skin portfolio, which includes Nair, Batiste, Viviscal, Flawless, and Toppik,” said Matthew T. Farrell, Church & Dwight chief executive officer. “The Mighty Patch® brand is a problem/solution product with a strong position in a growing category. The total acne treatment category in tracked channels is approximately $700 million. The patch form has grown to 18% of the acne treatment category as more consumers transition away from lotions and ointments to a patch solution. The brand skews towards younger consumers and consistently has a high level of brand loyalty and repeat purchase.”

Hero’s trailing 12 months EBITDA as of June 30, 2022 was approximately $45 million, with a 40% EBITDA margin. Church & Dwight expects to expand Mighty Patch®’s limited distribution by leveraging its US retailer relationships and international footprint.

“Hero is located in New York City with a highly capable management team led by the 3 founders, Ju Rhyu, Dwight Lee, and Andrew Lee,” Farrell continued. “In addition to cash, approximately 10% of the purchase price will be conveyed to the founders in restricted stock. The founders are expected to remain and continue to run the business while leveraging Church & Dwight’s scale and capabilities. We intend to maintain the NYC location and retain Hero employees. We are pleased to welcome them to the Church & Dwight family. Hero is nimble and asset light and should be an excellent fit at Church & Dwight.”

The three founders are thrilled about the partnership with Church & Dwight. “We are excited to combine a brand that people love with Church & Dwight’s expertise and scale to continue driving success and growth in the market. Our cultures are a strong complement to one another and we are ready to take Hero into the next chapter and beyond as part of the Church and Dwight family,” said Rhyu, co-founder/CEO, Hero.

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