ALLEGAN — Perrigo Co. plc intends to sell its Mexico and Brazil-based over-the-counter business to Boston-based global private equity firm Advent International.
Part of Perrigo’s Project Momentum cost savings initiative, the deal should close in the second half of the year. Terms of the transaction were undisclosed.
The Latin American business unit generated about $85 million in sales in 2020, and Perrigo is “confident the businesses will do well under Advent’s ownership as these are key areas of focus for their company,” President and CEO Murray Kessler said in a statement.
“After a thorough review, we concluded Perrigo does not have sufficient scale in its Latin American businesses,” Kessler said. “As the path to improving margins in these regions would be further dilutive for the foreseeable future, the decision was made to exit these businesses.”
The pending sale is the latest for Perrigo under a transformation plan that Kessler initiated in 2019. Perrigo previously divested three business lines for $2 billion, including the pending sale of its Rx generic drug business to New York private investment firm Altaris Capital Partners LLC for $1.55 billion. That deal should also close later this year.
The divestitures will give Perrigo $2 billion in cash that it can use to reduce debt and for further acquisitions to drive growth.
Since 2019, Perrigo has made seven acquisitions, including the 2019 deal for Grand Rapids-based Ranir Global Holdings LLC, a maker of oral care products, for $750 million. Proceeds from divestitures have gone to make bolt-on acquisitions.
In a call last week with brokerage analysts to discuss first quarter results, Kessler said that Perrigo would pursue “disciplined M&A.”
“I’m not going to just go out there and buy anything, so we are going through a disciplined approach and there are targets out there and we’ve evaluated a number,” Kessler said.
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