Carter-Wallace To be Split and Sold for $1.1 Billion

Carter-Wallace Inc. said on Tuesday it will be split in two and sold for a total of about $1.1 billion, ending more than a year-long process to sell the maker of Arrid antiperspirant, Trojan condoms and a host of other toiletries and pharmaceuticals.

Armkel LLC, a partnership of consumer packaged goods maker Church & Dwight Co. Inc. and private equity group Kelso & Co. LP, will buy the the consumer products business for a total of $739 million, including minor assumption of debt, Carter-Wallace and Church & Dwight said.

Church & Dwight, trying to add bulk through acquisitions, will buy Carter-Wallace’s U.S. antiperspirant and pet-care businesses for about $128 million, the company said. ArmKel, a 50-50 joint venture between Church & Dwight and Kelso, will acquire the rest of the domestic and international consumer businesses for $611 million.

Church & Dwight, which sells Arm & Hammer products and other brands, has an option to purchase Kelso’s interest in ArmKel in three to five years.

Meanwhile, a private equity group comprising MedPointe Capital Partners, the Carlyle Group and the Cypress Group will buy the health-care business for $408 million, MedPointe said in a separate news release. That business makes allergy, cold and other medications.

Carter-Wallace shareholders will receive $20.30 a share for the company, which is a 10 percent discount to Monday’s closing price.

The company said that CPI Development Corp., a private holding company that controls about 83 percent of the voting power ofCarter-Wallace, has agreed to vote in favor of the transactions, subject to limited exceptions. Other major shareholders have questioned the proposed transactions in recent weeks. Mario Gabelli, principal in Gabelli Asset Management, which owns Carter-Wallace stock in various funds, said in April the company should instead impose a cost-cutting plan and buy back stock to boost earnings before being broken up and sold.

The sale is expected to close in late summer, but both parts of the transaction must be consummated for either to happen, Carter-Wallace said.