Chattem

Chattem is a Chattanooga, Tennessee, producer and marketer of over-the-counter healthcare products, toiletries, dietary supplements, topical analgesics, and medicated skin care products. Originally named the Chattanooga Medicine Company, the company’s brand portfolio holds twenty-two brands including Allegra, Gold Bond, Flexall, IcyHot, Rolaids, Sun-In, Pamprin, Dexatrim, Aspercreme, and Selsun Blue. Two-thirds of Chattem’s products are produced by the company at its Chattanooga production facilities with the remaining produced by third-party producers. The company is a subsidiary of the French multinational pharmaceutical company Sanofi.

The company’s brands are sold nationally through mass merchandiser, drug and food retailers. In 2005, 70% of all sales by the firm were made through its top ten customers, which include Wal-Mart, Walgreens, and Kroger. Sales to Wal-Mart constituted 36% of Chattem’s total sales in 2005. Chattem supports these sales with a forty-five-person sales force and broadcast media advertising. Chattem has market penetration in the United States, Europe, Canada, Latin America, and the Caribbean.

History

• Chattem was founded by Zeboim Cartter Patten as the Chattanooga Medicine Company in 1879. The company incorporated in 1909 and has remained in Chattanooga, Tennessee, to this day.
• During World War II, the Chattanooga Medicine Company turned into a major supplier of K-Rations to the US Army, producing 34 million rations from 1942 to 1945, earning 5 "E" Awards for support of war efforts.^[2]
• The firm adopted Chattem as its name and went public in 1969.
• Chattem’s top and bottom lines grew significantly from 1989 through 1992. The source of this growth was the company’s strategy of purchasing under-marketed consumer brands and aggressively marketing those already in its portfolio. In 1993, Chattem experienced a 14% decline in sales as a result of the loss of Warner-Lambert’s Rolaids business. To fund a one-time special dividend in 1994, $75 million in high-yield bonds were issued.
• In January 2013, Chattem acquired the full rights to Rolaids, which had seen its brand effectively wounded under the ownership of Johnson & Johnson's McNeil Consumer Healthcare with a series of product recalls and quality control issues throughout 2010 that ended with most of the Rolaids line discontinued.^[3] The product was returned to the market with new trade dress by Chattem in September 2013, though production of Rolaids is not currently expected to return to Chattanooga.^[4]

Recent events

In October 2006, Chattem announced that it would acquire five brands for $410 million as a result of the merger between Johnson & Johnson and the consumer healthcare business of Pfizer. These brands are:

• ACT Anti-Cavity Mouthwash
• Unisom
• Cortizone 10
• Kaopectate
• Balmex-Diaper Rash Ointment

Pending the US government’s approval of the merger of Johnson & Johnson and Pfizer, Chattem will acquire five brands divested from the firms. Chattem has announced that it expects to take possession of the brands around January 2007. These are very mature brands and will provide $150 million in additional revenue to Chattem per year.

On December 21, 2009, Paris-based (France) Sanofi, the world's fourth largest drugmaker, said it was acquiring Chattem in a $1.9 billion cash deal. Sanofi said that the acquisition would be completed by the first quarter of 2010. ^[5]

References