The Shansby Group took the first step last month in building out its household products portfolio with the proposed acquisition of Procter & Gamble Co.‘s Spic and Span and Cinch brands for an undisclosed amount.
Gary Shansby, general partner at the firm, declined to provide financial details of the transaction, but said P&G will retain 10% ownership of the brands.
The San Francisco-based Shansby Group is known for its interest in consumer brands having to do with food, over-the-counter pharmaceuticals and personal care products, but the latest deal marks the firm’s foray into household products, which is odd, considering that Shansby spent part of his career at Clorox Co. and Colgate.
The firm has made plays for household product brands in the past, specifically, when Block Drug Co. was sold to SmithKline Beechum last year and divested itself of its household products division, but was outbid.
However, The Shansby Group recently tripled its commitment to household products, designating $200 million out of its current fund to building a presence in the space. The firm also hired a team of former top executives from Block Drug, including Peter Mann, who was president and the highest ranking non-family member at the company. Mann is now president and chief executive officer of what The Shansby Group is calling The Spic and Span Co.
Shansby said his firm’s plan is to buy several brands or companies, from P&G or others divesting their orphan brands, and improve their size, profitability and scope.
“Household products is a steady and stable business,” Shansby said. “It has slight growth, but good margins and is not prone to be impacted by economies – some brands have been around for 50 years or more.”
He added that household products is a natural fit for his firm, not only because of his experience in the area, but also because it runs along the same channels of distribution as food, personal care products and OTC pharmaceuticals.
P&G is selling its Spic and Span and Cinch brands, which together generate about $40 million in revenue, in an effort to rid itself of any non-global brands.
“P&G took their focus off these brands a few years ago and without marketing support they have been trending down,” he said. “We’ve not worried about that because once we pay attention to them and support them, they’ll return up.”