Unilever Pays for Colgate’s Colombia Detergents

Unilever’s $215m deal to acquire Colgate’s Colombia detergent division represents a 2x revenue multiple, pricey for retail acquisitions in LatAm, according to one New York-based consumer and retail equity analyst. “Price-to-sales ratios usually are under 1x,” he explains. However, a Colombia-based retail equities analyst says that the deal valuation is in-line with other Colombian retail industry deals. The New York analyst says the high multiple may reflect strong interest on the part of Unilever for the Colombian market, though it is not a significant deal for the global consumer products company in terms of size. Unilever has net income of about $5bn and about $58bn in annual sales. “This transaction will help Unilever significantly increase its currently modest market participation in Colombia,” a Unilever spokesman says, adding that Unilever has only a few local soap brands, such as Puro. The Fab brand, which is part of the acquisition, is the second largest brand in the market, with a 22% share, he says. A Colgate spokeswoman, who says the brands have annual sales of $105m, notes that after the deal closes in Q2, the company will still have other brands in the Colombian market in the oral, personal and home care segments. Citi acted as exclusive financial advisor and Wachtell, Lipton, Rosen & Katz acted as legal advisor to Colgate. The Unilever spokesman could not say if the company used any financial advisors or how it will finance the acquisition.