Clorox to Buy Purell Maker GOJO for $2.25 Billion
Health and wellness expansion boosts stock as deal adds $800M in annual revenue
Clorox shares rose 1.5% on Thursday after the consumer products company announced it will acquire GOJO Industries, the maker of Purell hand sanitizer, for $2.25 billion in cash. The deal, which values GOJO at a net purchase price of $1.92 billion after anticipated tax benefits of $330 million, represents approximately 17% of Clorox's current market capitalization and marks a significant expansion of the company's health and wellness portfolio.
GOJO generates nearly $800 million in annual sales with a three-year compound annual growth rate of 5%, primarily through business-to-business distributors. The addition of Purell—one of the world's most recognized hand sanitizer brands—will significantly bolster Clorox's presence in the hand hygiene market, a segment that experienced explosive growth during the pandemic and has since stabilized at elevated levels.
"The acquisition of GOJO accelerates our IGNITE strategy and delivers on our commitment to expand our Health and Wellness portfolio with brands that have strong consumer and professional equity," Clorox said in a company statement. The deal is expected to support Clorox's long-term sales growth target of 3% to 5%, becoming accretive to adjusted earnings per share in the second year following the acquisition's close, with neutrality expected in the first year.
The transaction carries strategic importance beyond just adding revenue. Clorox has been working to diversify its product mix and reduce reliance on traditional household cleaning products, which face intensifying competition and pricing pressure. GOJO's predominantly B2B distribution model will provide Clorox with access to professional channels it has historically struggled to penetrate, including hospitals, schools, and other institutional customers.
Financially, Clorox projects at least $50 million in run-rate cost synergies from integrating the businesses, though the company did not specify the source of those efficiencies. Street Insider reported that the acquisition will be funded through Clorox's existing cash balances and debt capacity, with financing expected to be a mix of cash on hand and new debt issuance.
Analyst reaction to the deal has been measured. According to MarketScreener data, major Wall Street firms including UBS, BNP Paribas Exane, Barclays, JPMorgan Chase, and Wells Fargo Securities all reiterated their existing ratings on Clorox in January, which range from neutral to sell. The consensus analyst target price stands at $119.76, roughly 6.7% above Thursday's closing price of $112.20.
The acquisition comes as Clorox faces challenges in its core business. Recent quarterly results showed an 18.9% year-over-year decline in revenue and a similar contraction in earnings, reflecting both the difficult comparison against pandemic-era demand and broader consumer weakness in the household products category. The company's trailing price-to-earnings ratio of 17.27 suggests investors have been cautious about Clorox's growth prospects outside of its traditional cleaning products.
GOJO Industries, a family-owned business based in Akron, Ohio, has been owned and operated by the same family since its founding in 1946. The company invented Purell hand sanitizer in 1988 and built it into the dominant brand in its category, particularly in the professional and healthcare markets. During the COVID-19 pandemic, GOJO experienced unprecedented demand growth that strained supply capacity but also significantly expanded brand awareness.
The deal is expected to close in the second half of Clorox's fiscal year 2026, subject to customary regulatory approvals and closing conditions. Clorox's board of directors has already approved the transaction, reflecting confidence in the strategic fit despite the relatively high acquisition multiple relative to GOJO's sales base.
For investors, the acquisition represents a bet that the post-pandemic normalization of hand hygiene habits will sustain GOJO's elevated sales levels and that the professional distribution channel will provide more stable growth than consumer retail. The $50 million in synergies represents just 6.25% of GOJO's annual sales, suggesting modest integration opportunities rather than a transformative restructuring.
Clorox's dividend yield of 4.4% provides some cushion for shareholders should integration prove challenging, and the company's strong free cash flow generation should help it quickly reduce any debt taken on to fund the deal. However, with 13 analysts holding a neutral rating on the stock and four recommending sell, the market appears skeptical about whether the GOJO acquisition will be sufficient to reignite Clorox's growth trajectory.