Gillette Co., the maker of Oral-B toothbrushes, agreed to buy the Rembrandt brand of teeth-whitening products from closely held Den-Mat Corp.
Terms of the deal weren't disclosed. It may be completed in the second quarter, Boston-based Gillette said. Den-Mat, based in Santa Maria, Calif., had about $73 million in 2003 sales from Rembrandt whitening toothpastes, bleaching kits, mouth rinses and breath fresheners.
Rembrandt gives Gillette, the world's No. 1 maker of razors and batteries, a share of the estimated $500 million in annual U.S. sales of at-home whitening products, which are more profitable than toothbrushes and toothpastes. Procter & Gamble Co. dominates the market with Crest Whitestrips, followed by Colgate-Palmolive Co.'s Simply White whitening gel.
"Rembrandt is a nice little niche brand," said Rita Freedman, a Philadelphia-based analyst at PNC Advisors, which has about $51 billion in assets including Gillette shares. "It's a tuck-in acquisition for Gillette. Whitening is a category that seems to have good growth."
Shares of Gillette fell 19 cents to $37.71 on the New York Stock Exchange. They've gained 2.7% this year.
Gillette's Oral-B business last year contributed $1.33 billion, or 14% of sales. The company has about a 34% share of the global toothbrush market, giving it the No. 1 spot.
Procter & Gamble introduced Crest Whitestrips in 2001, creating a market for at-home teeth whitening. Colgate brought out Simply White gel in 2002.
The two companies, which also make toothbrushes and whitening toothpastes, don't divulge sales of the product lines. Analysts say demand for the products is increasing.