Colgate Commands Share in Natural Care Market

As part of its strategy to focus on its higher-margin oral and personal care businesses, Colgate-Palmolive Company agrees to purchase Tom's of Maine. With Tom's of Maine now under its brand belt, Colgate enters the fast-growing health and specialty trade channel where Tom's toothpaste is the market leader, commanding 60 percent share. Tom's of Maine, founded in 1970 by Tom and Kate Chappell, pioneered natural toothpaste, mouthwash and deodorant. "The combination of Colgate, the global leader in Oral care, and Tom's of Maine, the leader in the Naturals category, is an exciting partnership with growth opportunities for both companies," says Reuben Mark, chairman and CEO, Colgate.

The transaction will be structured as an all cash acquisition of 84 percent of the outstanding shares of Tom's of Maine for an aggregate price of approximately $100 million, subject to adjustment at closing, which is expected in the second quarter of this year. The effect on Colgate's profits is expected to be neutral in 2006 but increasingly positive each year thereafter.