Irish-headquartered Perrigo has agreed to sell its infant formula business to MeridianMade in a deal worth up to US$175 million, marking a strategic shift towards its core consumer self-care and over-the-counter healthcare operations. The transaction is expected to simplify the company’s portfolio while transferring the infant nutrition operation to a specialist manufacturing platform. Read the official announcement from Perrigo.

Announced on 29 October, the deal comprises US$40 million in cash at completion and up to a further US$135 million linked to performance milestones through 2030. Completion is expected in the first half of 2027, subject to regulatory approvals and customary closing conditions. Perrigo outlined the terms in its official transaction announcement.

The business being transferred generated US$380 million in net sales during the four quarters ended 27 June 2026, demonstrating the scale of the operation. However, it recorded just US$8 million in adjusted operating income over the same period. Perrigo expects the transaction to bring its reported financial performance more closely into line with its continuing consumer self-care operations. These figures are detailed in the company’s investor announcement.

The divestment follows a strategic review of the infant formula operation and forms part of Perrigo’s wider plan to simplify and strengthen its business. The company develops and supplies consumer self-care and over-the-counter healthcare products across international markets, including medicines and wellness products designed to help consumers manage everyday health needs. By exiting infant formula manufacturing, Perrigo expects to improve its margin profile, reduce future capital expenditure requirements and direct investment towards its core healthcare categories. More information about the business is available on Perrigo’s corporate website.

For MeridianMade, the acquisition provides an opportunity to expand a manufacturing platform focused on infant nutrition. Its capabilities include spray drying, dry blending, packaging, research and development, clinical research and regulatory support. The transaction could allow the business to build on its specialist manufacturing capabilities, although completion remains subject to the stated conditions.

The transition also has implications for production planning and supply-chain continuity. Perrigo has said it will continue operating the infant formula business until the transaction closes, with a focus on safety, quality and maintaining supply. This provides a defined transition period for the businesses as they prepare for a change in ownership.

For the sector, the lesson is direct: Perrigo’s planned divestment illustrates how portfolio realignment can help a consumer healthcare company concentrate investment on its core categories, while creating an opportunity for a specialist manufacturer to develop its position in infant nutrition.

Source: Business Post / Perrigo / Reuters