In a significant move that underscores its strategic pivot towards strengthening its core business, The Clorox Company (NYSE: CLX) (“Clorox”) has officially announced the divestiture of its subsidiaries, collectively known as “Clorox Argentina”, which operate across Argentina, Uruguay, and Paraguay. This transaction sees the businesses transferred to Apex Capital, a private equity fund affiliated with Grupo Mariposa, a venerable food and beverage entity with a presence in 16 countries, and an investment consortium spearheaded by Diego Barral, Clorox’s former senior vice president and general manager of International operations. Although the financial specifics of the deal remain undisclosed, this strategic sale marks a pivotal shift in Clorox’s operational focus.

The sale encompasses two production facilities and the rights to certain Clorox brands within the aforementioned countries, alongside shared intellectual property for these brands. Importantly, Clorox’s Latin America research and development and corporate sectors are excluded from this deal, staying in Argentina to support Clorox’s continued activities in other Latin American markets. They will also offer transitional services to the newly rebranded Clorox Argentina, now operating as “Grupo Ayudin”.

Linda Rendle, Chair and CEO of The Clorox Company, reflected on the strategic nature of this transaction, aligning it with the company’s IGNITE strategy to hone its focus on core businesses for sustained, profitable growth. She expressed gratitude to the Argentine team for their robust management in a volatile market and confidence in the new ownership’s alignment with Clorox’s values and operational expertise, anticipating continued consumer and employee benefits under this new stewardship.

Clorox Argentina’s contributions to the company’s net sales were projected at about 2% for the fiscal year 2024, as per the recent earnings forecast in February 2024. The sale is expected to result in a one-time, after-tax charge of roughly $233 million in the third fiscal quarter of 2024, equating to an approximate $1.87 decrease in earnings per share, primarily due to a non-cash adjustment related to accumulated currency translation. This transaction is anticipated to slightly reduce Clorox’s fiscal year 2024 net sales growth by about half a point, with a negligible effect on adjusted earnings per share ranging from $0.00 to $0.02. The company has chosen not to update any previous financial guidance following this sale.

This strategic divestiture represents a critical step in The Clorox Company’s ongoing effort to streamline its operations and focus on its core business sectors, positioning itself for more consistent and profitable growth in the competitive global marketplace.

  Apex Capital, Argentina, business sale, Clorox Company, Diego Barral, Grupo Ayudin, Grupo Mariposa, IGNITE strategy, Paraguay, Uruguay