Dulux parent Nippon Paints to buy Pental consumer brands

The Japanese chemicals giant, which already owns Dulux paints and Selleys, is adding to its consumer portfolio with a deal to buy Pental brands including White King bleach and Lux.

Pental boss Charlie McLeish: ‘What we are announcing today creates a simplified and more focused business, while also realising value for shareholders.’ Picture: Stuart McEvoy

Japanese chemicals giant Nippon Paints will get its hands on some of Australia’s most trusted cleaning products including White King bleach, as well as laundry and cleaning brands Lux, Country Life and Velvet, after a deal to buy up the portfolio from Melbourne-based Pental.

Nippon will also take over a major manufacturing plant in the Victorian regional town of Shepparton.

Pental’s other well known brands include Little Lucifer and Jiffy firelighters, and cleaning brands Martha’s, Sunlight and Softly. Nippon already owns Dulux paints and Selleys.

Shares in Pental rocketed more than 30 per cent to 41.5c on news of the proposed sale.

Sales of White King bleach soared during the pandemic with the Shepparton factory pumping out 90,000 bottles a day of the cleaning agent, with its promise to kill 99.9 per cent of germs hooking anxious consumers.

Under a deal announced to the ASX on Wednesday, Pental said it had agreed to sell the bulk of its consumer products business and the Shepparton plant to Selleys, a division of Dulux Group for $60m. Japan’s Nippon Paints bought the then publicly listed Dulux for $3.8bn in 2019.

Pental will maintain control of its Duracell battery operations and its Bondi Soap brand, and will also keep its hampers arm, Hampers with Bite. It intends to focus more on online retail and new consumer retail opportunities outside of its traditional household cleaning, disinfectant, laundry powders and soaps business.

The proposed transaction is expected to complete on or around October 30, following shareholder approval and satisfaction of other conditions precedent. Following completion of the deal and subject to further review at the time of completion, Pental intends to return approximately 31c per share back to shareholders.

Following the sale, payment of the expected dividends and capital return payment of transaction and separation costs and repayment of bank debt ($1.3m), Pental is expected to have a healthy positive net cash position.

Pental directors and major shareholders are supporting the sale to Selleys and its parent Nippon.

“What we are announcing today creates a simplified and more focused business, while also realising value for shareholders,” Pental boss Charlie McLeish said.

“Selleys is a highly regarded business with significant capabilities within the consumer products space, including household cleaning. We believe that they are well equipped to continue to enhance the reputation of our products, including our flagship brand White King, as well as provide great opportunities for our employees.

“Selleys is committed to retaining manufacturing in Shepparton, offering employment to all current employees and growing the Pental consumer products business over time.”