Reckitt agrees to divest essential home business to Advent

Reckitt agrees to divest essential home business to Advent

Reckitt Benckiser Group plc ("Reckitt") has entered into an agreement with Advent International, L.P. ("Advent") to divest its Essential Home business ("Essential Home") for an enterprise value of up to US$4.8 billion, retaining a 30% equity stake in the divested unit. The transaction, expected to close by the end of 2025, is a significant step in Reckitt's strategic plan to reshape into a more efficient, world-class consumer health and hygiene company [1].

The divestment of Essential Home, which operates across the air care, surface, pest, and laundry segments, represents a key part of Reckitt's strategy to focus on a core portfolio of 11 high-growth, high-margin Powerbrands. The transaction values Essential Home at an enterprise value of up to US$4.8 billion, equivalent to a multiple of 7.7x its unaudited adjusted operating profit for the 12 months ending 31 March 2025 [1].

Reckitt expects to incur cash tax, transaction, and other one-off costs of approximately US$0.8 billion, with the majority payable in 2026. The cash proceeds from the sale will be subject to balance sheet adjustments and the value of Reckitt's equity stake rolled over at completion. Excess capital will be returned to shareholders, with an anticipated special dividend of around US$2.2 billion following completion of the transaction [1].

Commenting on the agreement, Kris Licht, Reckitt's Chief Executive Officer, stated, "This moves Reckitt towards becoming a simpler, more effective world-class consumer health and hygiene company and it will enable us to focus on a core portfolio of high-growth, high-margin Powerbrands. Essential Home will benefit from Advent's new majority ownership with our retained minority stake in Essential Home providing a potential long-term value enhancement opportunity for Reckitt" [1].

Ranjan Sen, Managing Partner at Advent, commented, "We are delighted to partner with Reckitt and the Essential Home management team. The carve-out represents a unique opportunity to create a focused, scaled platform of globally recognised home care brands that operate in attractive categories with structural growth tailwinds. We are confident we can build on the portfolio’s strong foundations to drive operational excellence and unlock the brands’ full potential" [1].

The divestment is expected to complete by 31 December 2025 following the completion of key elements of the separation of Essential Home from Reckitt's Core business, subject to regulatory approvals and consultation with Reckitt's works councils [1].

References:
[1] https://www.reckitt.com/media-landing/press-releases/2025/reckitt-agrees-to-divest-essential-home/