Perrigo Divests Dermacosmetics Business in Strategic Streamlining Move

Perrigo, the consumer health specialist, has agreed to sell its branded "dermacosmetics" business to Kairos Bidco, an investment vehicle overseen by private equity firm KKR, for up to 327 million euros ($381 million). This significant divestment aligns with Perrigo's recently unveiled "Three-S" strategic plan, marking a pivotal moment in the company's ongoing transformation efforts.

Deal Structure and Portfolio Impact

The transaction, announced on July 14, 2025, comprises 300 million euros ($349 million) in upfront cash and up to 27 million euros ($31 million) in potential sales milestones. The deal encompasses several popular skincare franchises, including ACO, Biodermal, Emolium, and Iwostin. Notably, Perrigo acquired Emolium and Iwostin, along with the non-prescription hair loss treatment Loxon, from Sanofi in 2020.

The divested dermacosmetics business generated 125 million euros ($146 million) in sales for 2024, contributing approximately 5% to Perrigo's operating income for the year. The company anticipates the sale to close in the first quarter of 2026, subject to customary closing conditions.

Strategic Alignment with "Three-S" Plan

Perrigo's CEO, Patrick Lockwood-Taylor, emphasized that this divestment aligns closely with the company's "Three-S" plan, which was fully unveiled at a virtual investor day in late February 2025. The plan focuses on three key pillars:

1. Stabilizing: Reinforcing Perrigo's consumer self-care business in the Americas.
2. Streamlining: Simplifying the company's international product portfolio.
3. Strengthening: Prioritizing the most lucrative products through investments, R&D, and targeted marketing initiatives.

This strategic realignment builds upon Project Energize, an "investment and efficiency" program launched in February 2024. Project Energize aims to deliver annual savings between $140 million and $170 million by 2026, partly through workforce reductions of around 6% of Perrigo's approximately 9,000 employees.

Financial Impact and Future Outlook

As of early May 2025, Project Energize had already yielded annual savings of approximately $159 million, with $20 million reinvested by the company. The sale of the dermacosmetics business is expected to further streamline Perrigo's operations and allow for increased focus on its core consumer self-care segments.

While the divestment represents a significant shift in Perrigo's portfolio, it underscores the company's commitment to its strategic transformation. As the pharmaceutical landscape continues to evolve, Perrigo's moves signal a determined effort to position itself for sustained growth and profitability in the competitive consumer health market.