Yellow Wood Partners (Yellow Wood), a Boston-based private equity firm focused on investing in consumer brands and companies, is to acquire the Scholl footcare brand, which operates globally outside of the Americas, from UK-based consumer-goods company Reckitt Benckiser Group (RB).
The acquisition will reunite Scholl with the Dr Scholl’s brand as one entity after 30-plus years of separate ownership. The combined business generates annual retail sales exceeding USD700 million with leading market shares in the footcare category globally.
The Dr Scholl’s brand is a category leader at major bricks and mortar and ecommerce retailers in the US. Similarly, the Scholl brand is a category leader in various regions such as France, Italy, Germany, the UK, Australia and many other markets outside of North America with deep penetration at both major retailers and independent pharmacies across Europe. In addition to its footcare products, the Scholl brand provides a diversified portfolio of skin care products, insoles, and treatment solutions for targeted foot conditions. The combination of Scholl and Dr. Scholl’s will create a global footcare brand operating in 50-plus countries as an integrated business.
Dana Schmaltz, Partner of Yellow Wood, says: “This transaction provides us with a unique opportunity to create a global brand as an undisputed leader in the footcare category. We are excited to reunite these two companies to continue the legacy and heritage of the century old Dr Scholl’s brand. The combined company will have the global resources to continue to develop innovative wellness products with a single vision focused on providing the best footcare products for consumers around the world. We are very proud of the work our management team and we have done thus far to build the Scholl’s Wellness Company as a standalone, highly-focused entity in the Americas, and, we look forward to the potential of capitalising on the company’s strong momentum with this highly complementary acquisition.”
Yellow Wood acquired the Dr Scholl’s brand in the Americas from Bayer AG in 2019 and has since successfully built out a full standalone Dr Scholl’s organisation. Successful business enhancement initiatives since acquiring the business include building its e-commerce capabilities, accelerating new product development, strengthening the senior management team, and optimising the consumer marketing mix.
Tad Yanagi, Partner at Yellow Wood, says: “Our experience of successfully executing corporate carve outs has helped us gain a deep understanding of the many complexities that accompany the separation of an operating subsidiary from a large global parent company. Our previous experience with other global multinational CPG companies enabled us to work directly with Reckitt Benckiser to create this opportunity. We look forward to using the full Yellow Wood operating capabilities to complete the Scholl transaction in a smooth manner. We are excited to bring the operating focus required to achieve what we believe is a strong future growth plan for the business that will benefit customers and employees around the world.”
The transaction is expected to be completed by the third quarter of 2021 and is subject to normal and customary closing conditions.
Guy Phillips from Spayne Lindsay & Co. LLP, and Sawaya Partners, LLC acted as financial advisers for the transaction. Fried Frank provided legal counsel to Yellow Wood on the transaction.