[Click eStock] "T&L, M&A Effect... Potential Growth in Patch Exports" Target Price Up

T&L Acquired by North American Partner Global Consumer Goods Company C&D

[Asia Economy Reporter Ji Yeon-jin] Shinhan Financial Investment announced on the 15th that global consumer goods company Church & Dwight (C&D) acquiring Hero, a partner company of T&L, will further expand T&L's exports, raising the target stock price to 54,000 KRW.

C&D announced on the 6th that it decided to acquire Hero for $630 million (8.8 trillion KRW). C&D is a company that owns multiple consumer goods brands such as 'Arm & Hammer,' 'OxiClean,' and 'Terra Breads,' recording annual sales of $5.2 billion (7.2 trillion KRW) in 2021. Its current market capitalization reaches $20 billion (27.8 trillion KRW). Since 2004, C&D has sustained an average annual sales growth of over 8% through acquiring at least one brand each year. This acquisition was also made as an investment to secure growth momentum.

Hero receives the trouble care brand 'Mighty Patch' through T&L. C&D's patch product line accounts for about 18% of the global acne care market worth $700 million (1 trillion KRW). Furthermore, as the acne care market is expected to grow, C&D is anticipated to expand the regions where Mighty Patch, previously limited to the US market, will enter.

Lee Dong-geon, a researcher at Shinhan Financial Investment, said, "With this acquisition, the export scale of hydrocolloid is expected to expand significantly from 2023," adding, "C&D conducted due diligence on T&L's production facilities, and during this process, it was understood that plans to expand the regions for Mighty Patch's market entry and to increase volume targeting potential penetration markets within the US were communicated."

T&L recently expanded its production facilities and plans to carry out additional expansions within the year to meet increasing demand. Before the two expansions, the annual production capacity of 70 billion KRW is expected to increase to 140 billion KRW.