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Yellow Wood tries on Dr Scholl’s for size
Posted on Tuesday, 23 July 2019 12:09
Yellow Wood Partners is putting its best foot forward within the orthotics and shoe insert segment by acquiring the Dr Scholl’s business from Bayer for USD 585.00 million.

The Boston-based private equity house will buy out all the product rights to the iconic, 110-year-old brand in the Americas and take over about 30 personnel in the US and Canada, including sales and marketing and research and development.

Bayer flagged a potential divestment of the business, which generated sales of USD 234.00 million in 2018, in its annual report for the year ended 31st December 2018.

The group is pursuing a strategy of strengthening its core life science operations and improving productivity through 2022 through the implementation of a series of portfolio, efficiency and structural measures.

At the time, Bayer noted it wanted to exit animal health, sell off the sun care (Coppertone) and foot care (Dr Scholl’s) product lines and offload its 60.0 per cent stake in Currenta.

Significant cost saving was also on the cards and included a reduction in internal research and development capacities at the pharmaceuticals segment.

Coppertone and Dr Scholl’s are part of the other category housed in Bayer’s consumer health division, which in all had sales of EUR 1.40 billion in the first three months of 2019 (Q1 2018: EUR 1.41 billion).

Bayer acquired these two brands in 2014 as part of the USD 14.20 billion acquisition of a slate of labels in the US from Merck and announced the sale of the sun care label last month to Beiersdorf for USD 550.00 million.

Dr Scholl’s will become part of a portfolio focused on consumer products across a variety of channels, including mass, drug, food, speciality, club and e-commerce.

The sale is one of 1,205 private equity-backed acquisitions announced so far in 2019, according to Zephyr, the M&A database published by Bureau van Dijk,

At USD 585.00 million, it is ranked 106th alongside Olympus Partners’s buyout of the plastics unit of UK-based packager DS Smith.

© Zephus Ltd