March 24 (Reuters) – Bleach maker Clorox Co (CLX.N) has been seeking to divest its vitamins, minerals and supplements (VMS) business after efforts to scale it led to major losses, according to four people familiar with the situation.
The VMS business represents just 3% of Clorox’s total net sales, yet in 2021 it forced it to take a $267 million writedown, equivalent to 57% of its most recent annual net earnings, as its vitamins and supplements lost market share to better known brands.
Clorox has been working with investment bank Goldman Sachs Group Inc (GS.N) for several months to find a buyer for VMS but has so far failed to attract an offer it deems attractive, the sources said.
The sources asked not to be identified because the divestment efforts are confidential. Clorox and Goldman Sachs declined to comment.
Brands under Clorox’s VMS division include RenewLife, Natural Vitality, NeoCell and Rainbow Light. Clorox entered the VMS sector in 2016 with the acquisition of RenewLife for $290 million, expanding the business in 2018 with the purchase of Nutranext for $700 million.
It has since written off 27% of the amount paid for the assets. Divesting VMS would enable Clorox to stem the bleeding as it grapples with a slowdown in demand for its cleaning products and disinfectants after the COVID-19 pandemic subsided.
Multiple rounds of price increases rolled out across an array of products over the last two years helped Clorox report a 1% year-on-year increase in its fiscal second-quarter net sales last month.
Reporting by Abigail Summerville in New York
Additional reporting by Jessica DiNapoli in New York; Editing by Kirsten Donovan
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Abigail is on the M&A team and writes about consumer and retail deals. She joined Reuters in 2022 from Debtwire where she covered leveraged finance and the primary debt market for three years. Previously, her work has appeared in the Wall Street Journal, CNBC and the Boston Business Journal. She majored in business journalism at Washington and Lee University. Contact: 332-261-5948