British nutrition products maker Reckitt Benckiser (RBGPF.PK, RB.L) announced Friday that it has entered into an agreement with private equity investor Advent International, L.P. to divest its Essential Home business. The transaction values Essential Home at an enterprise value of up to $4.8 billion.
The company plans to retain an interest in Essential Home through a 30% equity stake in Advent's acquisition vehicle.
The company said the enterprise value includes up to around $1.3 billion of contingent and deferred consideration.
The deal is expected to complete by December 31, subject to customary regulatory approvals.
The divestment is a key part of its strategy, announced last year, to reshape into a more efficient, world-class consumer health and hygiene company, focused on a portfolio of 11 high-growth, high-margin Powerbrands. Further, Reckitt plans to return excess capital to shareholders, and anticipates around $2.2 billion special dividend with share consolidation following completion
The special dividend will be in addition to Reckitt's ongoing share buyback programme, with Reckitt intending to announce its next buyback tranche with H1 2025 results on July 24.
Essential Home operates across the air care, surface, pest and laundry segments and generated around 2 billion pounds of net revenue in 2024, around 14% of Reckitt's total net revenue.
Kris Licht, Reckitt Chief Executive Officer said, "This moves Reckitt towards becoming a simpler, more effective world-class consumer health and hygiene company and it will enable us to focus on a core portfolio of high-growth, high-margin Powerbrands. Essential Home will benefit from Advent's new majority ownership with our retained minority stake in Essential Home providing a potential long-term value enhancement opportunity for Reckitt."
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