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NEW YORK - Colgate-Palmolive Company (NYSE:CL), a consumer goods giant with impressive gross profit margins of 60.6% and a strong financial health rating according to InvestingPro, announced today its agreement to acquire Care TopCo Pty Ltd, the owner of the Australian fresh pet food brand Prime100, in a strategic move to expand its Hill’s Pet Nutrition division into the fresh pet food category. The acquisition is set to complement Hill’s existing specialty pet food diets and enhance its presence in the Australian market.
Prime100, based in Melbourne, has been a prominent player in the fresh pet food sector since its inception in 2014, offering refrigerated and shelf-stable products that are science-backed and veterinarian-endorsed. The acquisition is anticipated to close in the second quarter of 2025, subject to regulatory approval in Australia. With Colgate’s robust annual revenue of $20.1 billion and consistent dividend payments maintained for 55 consecutive years, the company demonstrates strong financial capability for such strategic acquisitions.
Noel Wallace, Chairman, President, and CEO of Colgate, expressed that the acquisition aligns with their long-term growth strategy in pet nutrition and is expected to contribute to Hill’s portfolio with profitable fresh dog food assets. John Hazlin, President of Hill’s Pet Nutrition, echoed this sentiment, highlighting the potential for the expanded product range to offer more tailored nutritional solutions for pets.
The transaction will be financed through a combination of debt and cash, and is not projected to significantly affect Colgate’s diluted earnings per share for 2025. According to InvestingPro analysis, Colgate operates with a moderate level of debt and maintains sufficient cash flows to cover interest payments, suggesting a solid position for this investment. The company’s current market valuation appears to be near its Fair Value, with analysts projecting continued profitability for the upcoming year.
Legal and financial advisement for the transaction was provided by Wachtell, Lipton, Rosen & Katz and BofA Securities for Colgate-Palmolive, and Gilbert + Tobin and Houlihan Lokey (NYSE:HLI) for Prime100.
Colgate-Palmolive, a global company with a focus on Oral Care, Personal Care, Home Care, and Pet Nutrition, is known for its commitment to sustainability and community wellbeing. Hill’s Pet Nutrition, a subsidiary of Colgate-Palmolive, is renowned for its science-led pet nutrition products sold globally. For deeper insights into Colgate-Palmolive’s financial health and growth prospects, including 8 additional exclusive ProTips and comprehensive valuation metrics, visit InvestingPro, where you’ll find detailed analysis in the Pro Research Report, available for over 1,400 top US stocks.
This report is based on a press release statement and has been prepared without any promotional content or endorsement of the claims.
In other recent news, Colgate-Palmolive has been the subject of various analyst adjustments. TD Cowen maintained a positive outlook on the company with a $100 price target, citing gross margin expansion and strategic pricing as key factors in Colgate’s financial performance. However, Stifel reduced its price target from $95 to $93, following mixed financial results for Q4 of 2024 and projections for 2025. Stifel analysts foresee a pickup in organic growth in the second half of 2025, despite concerns about volume.
Barclays (LON:BARC) reiterated an Equalweight rating on Colgate-Palmolive with a steady price target of $83, highlighting the company’s significant sales in emerging markets. Barclays analysts expressed optimism that Colgate would maintain its advertising and promotion spend to meet guidance. Meanwhile, Raymond (NSE:RYMD) James adjusted its price target for Colgate-Palmolive shares, reducing it to $105 from the previous $110, while maintaining an Outperform rating. The firm’s analyst cited a cautious approach entering 2025 due to recent sales performance but emphasized the company’s long-term attractiveness.
These recent developments indicate a variety of perspectives on Colgate-Palmolive’s financial performance and future projections, underscoring the importance of strategic pricing, volume metrics, and emerging market sales for the company.
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