Closely held Seventh Generation Inc. is buying a maker of reusable filtered water bottles known as bobble, the company’s first brand acquisition outside of its namesake household cleaners and baby products

May 30, 2013, 7:43 p.m. ET

Seventh Generation Picks Up Bobble Brand

In Bid to Expand Reach, Firm to Buy Filtered Water Bottle Maker

By SERENA NG

Seventh Generation, known for its household cleaners, is buying the bobble, the reusable filtered water bottle brand, for an undisclosed sum.

Closely held Seventh Generation Inc. is buying a maker of reusable filtered water bottles known as bobble, the company’s first brand acquisition outside of its namesake household cleaners and baby products.

The acquisition for an undisclosed sum comes as Seventh Generation is looking to expand into new product areas through acquisitions, said Chief Executive John Replogle. The Burlington, Vt., company is looking for more brands and consumer products that fit with its mission of healthy living and sustainability, he said.

Seventh Generation was founded 25 years ago as a catalog company and now makes plant-based cleaning products, diapers and baby wipes that it touts as safer for people and the environment. Retail sales of its products topped $200 million last year and grew in double-digit terms during the recession, Mr. Replogle said.The company recently began looking for possible acquisitions and came across bobble, which Mr. Replogle described as “one of the leading players in the on-the-go water filtration market.” Seventh Generation plans to use its relationships with retailers to make bobble bottles more prominent in stores and increase sales, he said.

Bobble water bottles, which typically retail for $9.99, contain carbon filters that can be used 300 times before the filters need to be changed, according to bobble. Currently, roughly 28 billion disposable water bottles go to the landfill annually, Seventh Generation estimates.

Seventh Generation is buying the assets of Move Collective LLC, which comprise the bobble brand. More than 12 million bobble water bottles have been sold in over 30 countries through a wide range of retailers. Competitors include Clorox Co.,CLX -0.06% which began selling Brita filtered water bottles in the U.S. in 2011, andNewell Rubbermaid Inc., NWL +0.37% which also has a line of filtered bottles.

In 2007, San Francisco venture-capital firm Catamount Ventures paid more than $10 million for a minority stake in Seventh Generation, whose other shareholders include employees and a few family investment funds. The investment valued the company at roughly $100 million at the time, according to a person familiar with the matter.

Jed Smith, a partner at Catamount, said his fund doesn’t have a specific exit strategy for Seventh Generation but believes it could one day be a public company or a possible acquisition candidate for a larger consumer-products maker.

“We’re not actively trying to sell the company. We think its peak value is several years away,” Mr. Smith said, adding that the current plan is “to grow it as large as we can.”

Seventh Generation currently has no debt and is cash flow positive, Mr. Replogle said.