Perrigo has agreed to sell its Infant Formula business to MeridianMade, an American contract manufacturer focused on infant nutrition, for up to $175 million. The divestiture is part of Perrigo’s effort to simplify its portfolio and concentrate on consumer self-care products, including over-the-counter medicines.
The stated consideration includes $40 million in cash at closing, with as much as $135 million more payable if the business meets performance milestones through 2030. Perrigo says the sale is expected to improve its margin profile and reduce significant future capital spending.
Key details
- Price: Perrigo will receive $40 million in cash at closing. Up to an additional $135 million is contingent on performance milestones through 2030, bringing total potential consideration to $175 million.
- Strategic rationale: Perrigo says the sale advances the “Streamline” element of its plan to stabilize, streamline and strengthen the company. It intends to focus more resources on its core consumer self-care portfolio.
- Expected financial effects: Perrigo expects the divestiture to enhance margins and eliminate significant expected future capital expenditures. It also says removing Infant Formula will make its reported results more closely reflect the financial profile of its core business.
- Buyer’s role: MeridianMade is described as a U.S.-based manufacturing platform dedicated to infant nutrition. Perrigo says the buyer has domestic, infant-grade manufacturing infrastructure and operating capabilities to support continued production of safe, high-quality and affordable formula.
- Timing and conditions: The announcement does not specify a closing date or provide further details on the performance milestones.
What changes for investors
The sale would remove Infant Formula from Perrigo’s portfolio and shift the company further toward consumer self-care. The headline price is not all guaranteed: $135 million depends on future performance, while Perrigo expects the business to be transferred to a buyer focused exclusively on infant nutrition.