Colgate Sells Kendall Co. for $1.1 Billion

Consumer products giant Colgate-Palmolive Co. said Tuesday that it accepted a management-led buyout of its Kendall Co. health-care subsidiary in a deal that values the business at about $1.1 billion.

Under the agreement, Colgate will receive $910 million in cash and $50 million worth of debentures from a company formed by Kendall management and the investment banking firm Clayton & Dubilier.

In addition, Colgate said it would retain certain Kendall assets, including real estate and some overseas non-health care consumer products businesses.

It estimated the entire deal to be worth about $1.1 billion, a price that was in line with expectations of private industry analysts.

Colgate, which put Kendall on the block last spring, said the transaction would result in an after-tax gain of more than $200 million.

Colgate Chairman Reuben Mark said the sale would enable the company to focus on its vast array of global consumer products.

“It is a fine, well-managed company, but as the business does not fit in with Colgate’s long-term strategic focus, the sale will enable us to concentrate all of our attention on worldwide consumer products opportunities,” Mark said.

Among Colgate’s products are Fresh Start, Fab, Dynamo and Ajax cleansers; Colgate and Ultra Brite toothpastes, and Irish Spring and Palmolive bar soaps.

Other operations include Princess House crystal and Hill’s pet products.

The Kendall unit manufactures and supplies disposable medical products, such as surgical dressing and bandages and intravenous solutions, to hospitals and health-care facilities in 61 countries. Its best known consumer product is its Curity bandage brand.