Clorox Company: Consistent Growth, Above Average Dividend Yield, Attractive Valuation

The Clorox Company (CLX) announced the sale of their auto care business yesterday in an all cash transaction with gross proceeds of approximately $780 million. Clorox announced that they anticipate using the net proceeds from the sale to repurchase shares of Clorox common stock over the remainder of this current fiscal year. They indicated that the goal of this transaction was to reshape their portfolio to better align it to exploit key consumer megatrends such as health and wellness and sustainability. With this transaction, Clorox Company is divesting itself of all of their global auto care business which includes the market-leading brands Armor All and STP. Avista Capital Partners, the buyer, will acquire two auto care manufacturing facilities in addition to worldwide rights to distribute all of Clorox's global auto care brands. Clorox anticipates the transaction will be dilutive to earnings in the range $.26 - $.25 this fiscal year ending June 30, 2011. This transaction is subject to regulatory and other customary approval and is expected to close by calendar year-end.... Read more

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