EWING, NJ— The acquisition of IdeaVillage’s Flawless and Finishing Touch brands by Church & Dwight goes beyond the usual confines seen in corporate merger and acquisition activity.
While Church & Dwight is acquiring the hair removal brands for $475 million, the relationship with IdeaVillage does not end there. IdeaVillage will remain an active player with Flawless and Finishing Touch, managing the sales, marketing and product development of both brands through the end of 2021.
Should IdeaVillage hit 12-month net sales targets ending no later than December 31, 2021, the company could receive an additional earn-out payment of up to a maximum of $425 million in cash.
The deal is subject to regulatory approval and is expected to close in the second quarter, officials with Church & Dwight said.
Andy Khubani, founder and CEO of Ideavillage, acknowledged the unique terms of the deal, but added, “I think they respect our ability to innovate and move quickly along with our expertise in marketing our products direct to the consumer.”
Brian Buchert, vp/corporate strategy with Church & Dwight, said that Ideavillage has unique skill sets in marketing and innovation that Church & Dwight wanted to maintain. His company will be taking over the international and supply chain aspects of the two brands.
The seeds of the deal, which in the end could be valued at $900 million, were planted when officials from both companies met at an industry conference, Khubani said.
“The conversation began and then serendipity,” he noted. “They were interested in Flawless from the beginning.”
Buchert said that several factors drove Church & Dwight’s interest in Flawless, which in 2018 had sales of approximately $180 million.
“Flawless is an emerging brand in the category of female electronic hair removal that has been underserved,” he said. “Church & Dwight has acquired a number of specialty hair care brands over the past few years that are focused on more technology innovations.”
Over the past five years, Church & Dwight has expanded its roster of hair care brands through acquisition, which includes Batiste dry shampoo, Toppik hair fibers and Viviscal for thinning hair. The company also owns a host of other well-known consumer brands such as Arm & Hammer, Nair, First Response and OxiClean.
Khubani also noted that the deal with Church & Dwight could allow Ideavillage to broaden its retail customer base.
“They have broad distribution in supermarkets, have very strong relationship with the military and have global distribution that Ideavillage does not have,” he said.
Buchert added, “We can learn a lot in areas of direct marketing and quick to market innovation. Our goal is to work with Ideavillage on other new opportunities into the future and this is the beginning of our relationship.”