Opinion ID: 6189
Heading Depth: 2
Heading Rank: 4

Heading: Combat Enters the Picture

Text: 16 Soon after Omnitech executed the $2.5 million note with Wachovia, American Cyanamid announced the sale of its Shulton Division in the Wall Street Journal via public auction. The Shulton Division marketed and distributed, among other products, Pine-Sol cleaners and Combat insecticides. Clorox was apparently quite interested in both products. On February 23, 1990, Clorox requested an offering memorandum and confirmation agreement from American Cyanamid, and subsequently made a non-binding bid to purchase the Shulton Division on April 14, 1990. Omnitech learned of Clorox' interest in bidding for the Shulton Division in February 1990, but claims that Clorox repeatedly assured Omnitech that the potential acquisition would not have any negative impact upon Clorox' evaluation and/or production of the Dr. X product. According to Omnitech's president, Fred Cortes (Cortes), when he contacted Clorox' manager of business development, Mike Scisco (Scisco), after the sale, Scisco assured him that Omnitech and its personnel were the luckiest people around because now [Clorox was] in the insecticide business. According to Cortes' account, Scisco represented that Clorox felt that it now had the best aerosol on the market in Dr. X Roach Spray, and the best roach trap on the market in Combat. 17 Meanwhile, however, Clorox continued to postpone the Omnitech STM. On June 20, 1990, Clorox announced that it had won the bid to purchase the Shulton Group from American Cyanamid. Clorox claimed that, in acquiring the Shulton Division, it accomplished its longstanding goal to acquire Pine-Sol, the number-one brand of household cleaners in the United States and to enter the insecticide category with an effective and marketable bait trap technology. Omnitech, reading the handwriting on the wall, pushed for commitments from Clorox, including, alternatively, a bid for packaging the Combat products. Clorox informed Omnitech that the Dr. X evaluation, including the STM, had been put on indefinite hold due to the Shulton acquisition.