Perrigo to sell Dermacosmetics business to KKR's Kairos Bidco for up to €327mln

Perrigo has agreed to sell its Dermacosmetics business to KKR's Kairos Bidco for up to €327m. The deal includes €300m upfront and an additional €27m contingent on sales milestones. Perrigo will direct the net proceeds from the transaction to strengthen its balance sheet and support long-term value creation. The sale advances Perrigo's Three-S plan to stabilize, streamline, and strengthen the organization. The transaction is expected to close in Q1 2026, subject to customary conditions.

Perrigo Company plc (NYSE: PRGO) has announced its agreement to sell its Dermacosmetics business in Northern Europe, the Netherlands, and Poland to Kairos Bidco AB, an investment vehicle managed by an affiliate of KKR. The transaction, which includes a €300 million upfront payment and an additional €27 million contingent on performance milestones, is expected to close in Q1 2026, subject to customary conditions [1].

The sale is part of Perrigo's strategic Three-S plan to stabilize, streamline, and strengthen the organization. The net proceeds from the transaction will be directed towards bolstering Perrigo's balance sheet and supporting long-term value creation. The sale further rationalizes Perrigo's portfolio, following earlier divestitures such as Rx, HRA Rare Diseases, and Hospital & Specialty [1].

Key terms of the agreement include a €300 million cash payment at closing, subject to customary working-capital, inventory, debt, and cash adjustments. Additionally, Perrigo is eligible for up to €27 million of contingent consideration tied to performance milestones over a three-year period. Post-closing, Perrigo will provide transition services for a fee [1].

The transaction is contingent upon several conditions, including antitrust and other regulatory approvals, completion of agreed pre-closing restructurings, works-council consultations in certain jurisdictions, and consummation of KKR's separate acquisition of Karo Healthcare. Either party may terminate the deal if it is not completed within 18 months [1].

Perrigo must continue to operate the Dermacosmetics business in the ordinary course, seek Kairos's consent for certain actions, and enter into non-compete and non-solicitation agreements until the closing. Standard representations, warranties, and indemnities apply, with certain confidential schedules omitted [1].

This sale aligns with Perrigo's goal of focusing on its core consumer-self-care operations and reducing debt. The management disclosed the deal via Form 8-K (Item 1.01) and a press release (Exhibit 99.1) [1].

References:
[1] https://www.stocktitan.net/sec-filings/PRGO/8-k-perrigo-company-plc-reports-material-event-fba4e7c29b16.html