Perrigo Divests Dermacosmetics Business in Strategic Realignment

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 ($381 million). This move aligns with Perrigo's recently unveiled "Three-S" strategic plan, focusing on streamlining operations and reinforcing its core consumer self-care business.

Deal Structure and Portfolio Impact

The transaction comprises €300 million ($349 million) in upfront cash, with the potential for an additional €27 million ($31 million) in sales milestones. The deal encompasses several popular skincare franchises, including ACO, Biodermal, Emolium, and Iwostin. Notably, Perrigo acquired Emolium and Iwostin, along with the hair loss treatment Loxon, from Sanofi in 2020.

The divested dermacosmetics business generated €125 million ($146 million) in sales for 2024, accounting for approximately 5% of Perrigo's operating income. The company anticipates the sale to close in the first quarter of 2026, marking a significant step in its portfolio optimization efforts.

Strategic Realignment and Efficiency Initiatives

Perrigo's divestment is part of a broader strategic overhaul initiated in early 2025. The "Three-S" plan, unveiled at a virtual investor day in February, focuses on stabilizing, streamlining, and strengthening various aspects of the business. Key objectives include:

1. Reinforcing the consumer self-care business in the Americas
2. Simplifying the international product portfolio
3. Prioritizing high-potential products through targeted investments, R&D, and marketing efforts

This strategic shift builds upon the company's earlier "Project Energize," launched in February 2024. The efficiency program aims to deliver annual savings between $140 million and $170 million by 2026. As of the first quarter of 2025, Perrigo reported that Energize had already achieved annual savings of approximately $159 million, with $20 million reinvested into the business.

Workforce and Operational Impact

As part of its efficiency drive, Perrigo announced plans to reduce its workforce by around 6%, affecting approximately 540 employees based on its early 2024 headcount of 9,000. This restructuring aligns with the company's broader efforts to streamline operations and focus on core growth areas.

Patrick Lockwood-Taylor, Perrigo's chief executive, emphasized that the dermacosmetics divestment is a key step in executing the "Three-S" plan. The move allows Perrigo to concentrate resources on its prioritized consumer self-care segments while optimizing its international presence.