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Clorox Wants to Help Clean Up Your Digestion

May 03, 2016

Clorox (clx) is best known for its namesake liquid bleach, Glad garbage bags, and Brita water filters. But now the consumer products giant is taking aim at a whole new market: digestive health.

On Tuesday Clorox said it has bought Renew Life, a $115 million-a-year digestive supplement brand with a heavy focus on probiotics to take advantage of a booming but "highly fragmented" $10 billion market that is growing 7% a year. Within that, probiotics are a $1.3 billion product category expected by analysts to grow 15% a year.

"The Renew Life acquisition is consistent with our strategy to accelerate growth through bolt-on acquisitions of leading brands into fast-growing categories with attractive margins," Clorox CEO Benno Dorer said in a statement.

Clorox, whose many other brands include Liquid Plumr and Burt's Bees, said Renew Life would add about 2% to its annual sales. The company also has a sizable business serving hospitals and other health care facilities.

The news came as Clorox, which competes with the likes of Procter & Gamble (pg) and Colgate Palmolive (cl), reported strong quarterly results.

The company raised its full-year earnings forecast to a range of $4.85 to $4.95 a share from $4.75 to $4.90. It now expects sale to grow 1% to 2%, rather than range from flat to rising 1%. Its gross profit margin rose to 45.3% in its most recent quarter from 43.2% a year before, helped by favorable commodity costs, cost savings, and price increases.

Excluding discontinued operations, Clorox, which last year exited the once important market of Venezuela, had earnings of $159 million, or $1.21 a share, above the $1.11 a share analysts were expecting, according to Thomson Reuters. Revenue rose to $1.43 billion in the quarter.

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