Clorox Buys Burt’s Bees
There’s an interesting feature in the New York Times’ Business section today about Burt’s Bees. This is the formerly homespun and formerly Maine-based personal care products company that lately seems to have become much more popular for its marketing — a sort of hippie-esque eco-consciousness — than it ever was for its actual products. Personally, I can remember when the company’s lip balms, for instance, were actually difficult to find. Now they seem to be featured on colorful endcaps in every grocery store I walk into. As it happens, there’s a reasonable explanation for all that: Burt’s Bees was acquired by Clorox this past November, if you can believe it, for the almost unbelievable sum of $913 million.
Note >> Interestingly enough, Clorox didn’t buy the Burt’s Bees company from its two founders, Roxanne Quimby and Burt Shavitz. (The bearded man in the Burt’s Bees logo is modeled after Shavitz.) Why? Because a New York-based equity firm known as AEA Investors had already beat them to it, way back in 2003. Quimby, in fact, sold 80 percent of the company to AEA for the whopping sum of $141.6 million. So naturally, after Clorox acquired AEA’s 80 percent, they went knocking on Quimby’s door for the remaining 20. They offered her $183 million. She complied.
According to the article’s author, Louise Story, “Clorox was willing to pay almost $1 billion for Burt’s Bees because big companies see big opportunities in the market for green products. From 2000 to 2007, Burt’s Bees’ annual revenue soared to $164 million from $23 million. Analysts say there is far more growth to be had by it and its competitors as consumers keep gravitating toward products that promise organic and environmental benefits.”
I found the following paragraph even more surprising: “In the last couple of years, L’Oréal paid $1.4 billion for the Body Shop and Colgate-Palmolive bought 84 percent of Tom’s of Maine, which makes natural toothpaste and deodorant, for $100 million. Clorox is also creating eco-friendly product lines of its own.”
So who knows? Maybe all this corporate buyout business will have its own happy ending. And by the way, if you’re wondering what Roxanne Quimby did with her $324.6 million, click here. [Hint: She’s seems to be something of a dyed-in-the-wool entrepreneur.]