P&G buys New Chapter
BRATTLEBORO -- The largest consumer goods company in the world is coming to Brattleboro to try some new medicine.
Procter & Gamble, a multi-national corporation headquartered in Cincinnati, closed a deal late Thursday night to purchase New Chapter Inc., a small company based in Brattleboro that has been making and marketing vitamins and supplements since 1982.
New Chapter is a privately owned company, and financial details of the deal were not released Friday.
"For us, this has been a dream come true," New Chapter co-founder Paul Schulick said Friday, less than 24 hours after the New Chapter Board of Directors approved the deal. "This is what we have been wanting to do since we started doing this 30 years ago. The world and the United States need this. This has to happen."
Procter & Gamble did $82.6 billion in sales in 2011, and the corporation owns brands as divergent as Cascade dishwashing products, Duracell batteries and Iams brand pet food.
The New Chapter acquisition marks the company’s first entrance into the growing vitamin and supplement market
About 180 employees work for New Chapter in the Brattleboro office, and another 100 or so sales representatives work for the company across the country.
New Chapter co-founder Paul Schulick said the deal to him presents an opportunity to broaden the market for his vitamins and supplements, and to bring New Chapter’s whole food supplements and vitamins into more medicine cabinets across the globe.
Paul and Barbi Schulick started manufacturing their herbal products in their garage in Lexington, Mass. in 1982.
They moved to Brattleboro in 1986, and the company has expanded as natural and herbal remedies expanded into the conventional marketplace.
"We have endured an era in which health foods were considered an oddity and the scientific community uniformly dismissed the notion of herbal therapeutics," Paul Schulick told the staff Friday while announcing the deal. "We have stood firm and played our part to assist in a cultural shift, and now we celebrate a time when natural foods products are in virtually every mass market chain and pharmacy."
The Schulicks will remain with the company.
Paul Schulick will become executive vice president of Science and Innovation, while Barbi Schulick will assume the role of vice president of Organization and Culture.
There are no immediate plans for layoffs or changes.
Kyle Garner, a Procter & Gamble employee, will come on as new Chief Executive Officer.
Procter & Gamble President of Global Health Care, Thomas Finn, said the company was not looking to make any changes to New Chapter.
According to Finn, Procter & Gamble has wanted to get into what he said was a growing market.
Finn said Procter & Gamble recognizes that New Chapter has grown on the strength of its innovation, its science, and its staff, and Finn said the company did not want to make any changes to disrupt that model.
"After our first meeting I fought very hard for this," Finn said. "I said that we had to do this, and we had to do it in a way that did not mess up the magic that has worked for so long."
Paul Schulick said he was looking forward to using Procter & Gamble’s resources to expand sales, strengthen the company’s supply chain, and more effectively navigate the increasingly complex regulatory landscape and regulatory process.
He did not know he would be selling his company when he started looking for capital 18 months ago, but he said that as negotiations expanded with Procter & Gamble it became clear that this was the right deal, at the right time, for New Chapter.
"When you run a small business you never know what is around the corner, he said. "We have always run this company with limited resources, and to build the company, we need more resources. We all feel like this is going to allow us to continue doing what we feel like we have to do."
New Chapter Board President Liz Bankowski said the deal with Procter & Gamble came together over the past few months while New Chapter was out looking for funding to sustain its steady growth.
After New Chapter talked with a number of venture capital firms, as well as with other large companies, Procter & Gamble made its intentions clear that it was interested in purchasing New Chapter outright.
Bankowski said that while there are no limitations written into the contract signed between the two companies, she believes Procter & Gamble is committed to keeping the business in Brattleboro, and not reducing its workforce.
New Chapter will be a stand alone, wholly owned subsidiary, Bankowski said, and the Brattleboro office and packaging plant will retain all of its human resources, accounting and marketing staff, she said.
"They understand the demographic," Bankowski said. "They recognize the reputation New Chapter has and it would not be in their interest to purchase the company, and then blow it up."
Procter & Gamble announced last month that it would be cutting 5,700 jobs, or 10 percent of its global workforce, by the end of 2013 in a move to cut costs and restructure the company, the Associated Press reported.
Barbi Schulick said she would not have authorized the deal unless she was certain that the Brattleboro office would remain intact.
"It would not be smart for them to remove all of the things that have helped make us a success," she said. "The whole process has been positive for us. This is a natural next step for us, and we are very grateful that we have been given this opportunity."
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