Church & Dwight Co.'s (CHD) $650 million purchase of gummy-vitamin maker Avid Health Inc. is counting on getting more adults to buy vitamins that kids love.

Avid makes the top-selling gummy-vitamin brands for children, L'il Critters, and for adults, Vitafusion, but the bigger opportunity lies in the latter consumer. Nearly 60% of children's vitamins are sold in gummy form today, but only about 3% of adult vitamins are, Church & Dwight Chairman and Chief Executive Jim Craigie said Tuesday.

"We are confident that there's a significant opportunity to grow gummy form in adult vitamins, and continue to grow the kid gummy-vitamin business," Mr. Craigie said on a conference call to discuss the acquisition that was announced late Monday.

Adult vitamin's offer a bigger pool of money to go after, too. Church & Dwight estimates that the vitamin and mineral category has about $5 billion in annual sales, with sales of adult vitamins 16-times larger than those of kids vitamins. The opportunity among adults is attractive, Mr. Craigie said, as an aging population take more vitamins to improve health and live longer.

Avid does face competition from retailers' private-label gummy vitamins, which make up about 10% of the category, and from other vitamin brands, like Bayer AG's (BAYRY, BAYN.XE) One A Day, which have recently started making vitamins in gummy form.

Mr. Craigie said Avid sets itself apart because it only makes gummy vitamins at its own manufacturing plants, whereas competitors use contractors to make the products. That makes its products taste better, something that Mr. Craigie tested while performing due diligence for the deal.

"Eating over 25 vitamins in one day is no simple task," Mr. Craigie said. "But I wanted to be absolutely sure we were buying the company with a superior product."

Church & Dwight shares were up 4.3% Tuesday, as investors digested the deal, the largest ever by Church & Dwight, according to deal tracker Capital IQ. It is also the first major acquisition for the company since 2008, when it paid $383.4 million for the Orajel mouth-numbing gel and other brands. The company has made several smaller deals since, like the June 2011 acquisition of the Batiste dry shampoo brand, but has been unable to pull the trigger on a large-scale deal that gets it into a new category.

Mr. Craigie has groused in recent months that asking prices were too high for companies that met Church & Dwight's acquisition criteria, creating a standstill in the mergers and acquisition arena even though borrowing costs were at all-time lows.

Avid allows Church & Dwight, owner of the Arm & Hammer brand and Trojan condoms, to enter an entirely new category in the personal-care space, a part of its business that has not been growing as well as its household products, like laundry detergent.

Avid, with $230 million in sales for the year ended June 30, has been growing at a rapid clip, with sales up nearly 50% a year over the last three years, according to Morgan Stanley's analysis of Nielsen & Co. data. That's well ahead of the 19.1% growth for the total vitamin category over the same time.

Church & Dwight is paying for that growth. The $650 million purchase price represents 11.2-times Avid's earnings before interest, taxes, depreciation and amortization for the last 12 months. Church & Dwight expects to cut $15 million in annual costs from Avid's operations by 2014, taking some of the air out of that purchase multiple.

Church & Dwight is paying for the deal with cash and debt, though it declined to disclose the breakdown.

--David Benoit contributed to this article.

Write to Paul Ziobro at paul.ziobro@dowjones.com

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