MidOcean to score 5x return on Water Pik

MidOcean Partners is poised to collect an about 5x return on its initial investment in water flosser maker Water Pik, a source familiar with the matter told Buyouts.

The middle-market firm said July 17 it would sell Water Pik, Fort Collins, Colorado, to Church & Dwight, parent of consumer product brands including Arm & Hammer detergent and Nair hair removal.

Church & Dwight said it would pay $1 billion cash for Water Pik, representing about 2.8x the target’s $265 million in net sales on a trailing-12-month basis. The price-to-EBITDA multiple pans out to about 12.5x, based on about $80 million in trailing-12-month EBITDA.

The deal results from exclusive discussions between the parties after Church & Dwight approached the sellers more than a year ago, the source said. MidOcean, advised by Harris Williams and Wells Fargo, did not conduct a formal auction process, this person added.

B of A Merrill Lynch advised Church & Dwight on the deal.

For New York-based MidOcean, the deal comes four years after it acquired the distributor of branded oral-health products alongside Vulcan Capital. Previous backers included EG Capital Group and Carlyle Group’s Zodiac Marine & Pool.

MidOcean’s July 2013 investment was made through its third fund, which closed on $1.25 billion in 2007.

Led by CEO Richard Bisson, Water Pik makes oral-health products, including water flossers and electric toothbrushes, and replacement shower heads under the Water Pik brand. The company also distributes dental supplies to medical professionals.

Water Pik saw double-digit top-line and bottom-line growth under MidOcean, fueled by new-product development and innovations, dental professional marketing efforts and a new infomercial campaign.

Its products are marketed in the U.S. and Canada and are exported to more than 80 countries.

For MidOcean, the investment follows its sale of Agilex Fragrances to Firmenich. Terms of the June 14 deal weren’t disclosed, but MidOcean commanded 5.6x its initial investment on the sale, a source familiar with the matter told Buyouts at the time.

Also in June, MidOcean took a majority stake in Affinity Dental Management Holdings, a newly created dental-services organization in the New England region.

In other recent exits, MidOcean was set to score a 3.5x return in connection with the sale of Penton to Informa plc last fall. MidOcean and Wasserstein & Co sold the company for $1.56 billion.

Action Item: Reach MidOcean Managing Director Jonathan Marlow at jmarlow@midoceanpartners.com

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