Latest news with #KrisLicht
Irish Examiner
3 days ago
- Business
- Irish Examiner
Reckitt to sell homecare unit including Air Wick and Cillit Bang for $4.8bn
Reckitt Benckiser agreed to sell most of its homecare business to private equity firm Advent International for an enterprise value of up to $4.8bn (€4.12bn) as the UK consumer goods company focuses on faster-growing operations. Reckitt said it will retain a 30% stake in the business, whose brands include Air Wick air fresheners and Cillit Bang cleaners. The enterprise value includes up to about $1.3bn (€1.1bn) of contingent and deferred consideration, the company said on Friday. Shares of Reckitt rose as much as 2.3% in early London trading before paring back some of the gains. The stock is up nearly 14% in the past 12 months Chief executive Kris Licht last year announced plans to sell some of Reckitt's non-core homecare brands and review options for its infant formula business. The proposed sale was part of his strategy to streamline Reckitt and focus on faster growing parts of the business, after a difficult few years where consumer goods companies have had to contend with stretched consumer budgets and shoppers trading down to unbranded products. Reckitt's homecare unit was boosted during the pandemic when demand for cleaners and disinfectants soared, but those benefits have diminished. The company now expects faster growth from consumer-health labels like Strepsils lozenges, Durex condoms and Mucinex cold remedies, while retaining better performing home-care brands like Lysol and Dettol. Reckitt expects to pay a special dividend of $2.2bn (€1.89bn) to shareholders following the completion of the deal, which is expected by December 31. It will also incur one-time costs of about $800m related to the transaction. Barclays and Citigroup advised Advent, while Goldman Sachs and Morgan Stanley were lead financial advisers to Reckitt. The valuation for the businesses being sold is below the initial $8bn Reckitt sought when it put the brands up for sale last year. Reckitt's sale process was hit with anxiety around US tariffs, which has cast uncertainty over the the outlook for global businesses with international manufacturing. The deal has been structured so that the greater risk in the current market environment is shared between the two parties, with Reckitt retaining a stake and needing to hit certain milestones to generate the full payout. With a lot resting on a successful execution of a deal for the homecare assets this outcome should still 'be a boost to management's credibility,' according to James Edwardes Jones and Wassachon Udomsilpa, RBC analysts. They said it will enable investors to focus more closely on the core Reckitt business in a note to clients. The deal will be financed with about $2.3bn of term loans, denominated in euro and dollars, underwritten by a group of banks and it's expected to be syndicated to institutional investors post summer. In March, Reckitt said it expects modest sales growth this year as it reshapes the business — a move it said would deliver a significantly stronger performance starting in 2026. The infant formula unit, created by the $17bn acquisition of Mead Johnson in 2017, remains a sore point for Reckitt. Licht acknowledged last year that the unit, which has been hit by legal woes in the US, hasn't always been a natural fit in the group. Bloomberg
Yahoo
3 days ago
- Business
- Yahoo
Reckitt sells Essential Home stake to Advent for $4.8 billion
By Yadarisa Shabong (Reuters) -Reckitt has sold a majority stake in its Essential Home business to private equity firm Advent International in a deal valued at $4.8 billion including debt, it said on Friday. The consumer goods group said it would retain a 30% stake in the business, which makes Air Wick fresheners, Cillit Bang cleaners and insecticide Mortein. Reuters exclusively reported last month that the two parties were in talks over a sale, with Reckitt likely to retain a minority stake. Reckitt CEO Kris Licht has been trying to turn around the business and ease shareholder concerns over the strength of its brands in North America and Europe, where consumer confidence has been weak. A Reckitt spokesperson said the decision to retain a stake provided a potential long-term value opportunity and the deal structure maximised returns for shareholders. Shares in the company rose as much as 2.3% in early trade before paring gains to stand 0.8% up at 0840 GMT. "It was the perfect storm between a seller who needs to sell and a buyer with no competition," a source close to the matter said on Friday. The value of the transaction includes up to $1.3 billion in performance-based and delayed payments tied to how the business performs and other financial conditions, Reckitt said, adding that the deal is expected to close by the end of the year. "This should be a boost to management's credibility, quite a lot of which was resting on successful execution of this deal," RBC analyst James Edwardes Jones said in a note, though he did describe the proceeds as underwhelming. JPMorgan analysts also noted that the deal financials were weaker than expected, adding that Reckitt's remaining stake in the business leaves it with large exposure and risks related to Essential Home's performance. Reckitt said it plans to return excess capital to shareholders, including a special dividend of about $2.2 billion and a share consolidation, after the deal closes. Essential Home accounted for about 13% of group revenue in the first quarter but sales have struggled for several quarters. Reckitt, brands of which include Dettol handwash and Durex condoms, has also been considering options for its litigation-hit baby formula business, Mead Johnson.
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Business Standard
3 days ago
- Business
- Business Standard
Reckitt Benckiser sells homecare brands to Advent in $4.8 billion deal
Reckitt Benckiser Group Plc agreed to sell most of its homecare business to private equity firm Advent International for an enterprise value of up to $4.8 billion as the UK consumer goods company focuses on faster-growing operations. Reckitt said it will retain a 30 per cent stake in the business, whose brands include Air Wick air fresheners and Cillit Bang cleaners. The enterprise value includes up to about $1.3 billion of contingent and deferred consideration, the company said Friday. Shares of Reckitt rose as much as 2.3 per cent in early London trading before paring back some of the gains. The stock is up nearly 14 per cent in the past 12 months through Thursday's close. Chief Executive Officer Kris Licht last year announced plans to sell some of Reckitt's non-core homecare brands and review options for its infant formula business. The proposed sale was part of his strategy to streamline Reckitt and focus on faster growing parts of the business, after a difficult few years where consumer goods companies have had to contend with stretched consumer budgets and shoppers trading down to unbranded products. Reckitt's homecare unit was boosted during the pandemic when demand for cleaners and disinfectants soared, but those benefits have diminished. The company now expects faster growth from consumer-health labels like Strepsils lozenges, Durex condoms and Mucinex cold remedies, while retaining better performing home-care brands like Lysol and Dettol. Reckitt expects to pay a special dividend of $2.2 billion to shareholders following the completion of the deal, which is expected by Dec 31. It will also incur one-time costs of about $800 million related to the transaction. Barclays Plc and Citigroup Inc. advised Advent, while Goldman Sachs Group Inc. and Morgan Stanley were lead financial advisers to Reckitt. The valuation for the businesses being sold is below the initial £6 billion ($8 billion) Reckitt sought when it put the brands up for sale last year, Bloomberg News reported earlier. Potential buyers, which also included Lone Star Funds, pitched valuations in a lower range of £3 billion to £4 billion, according to people familiar with the matter. The deal represents a compromised exit of the asset, according to David Hayes and Molly Wylenzek, equity analysts at Jefferies. 'At only a net value of £3 billion it is up to £1 billion lower than many had hoped,' they said in a note. Reckitt's sale process was hit with anxiety around US tariffs, which has cast uncertainty over the the outlook for global businesses with international manufacturing. The deal has been structured so that the greater risk in the current market environment is shared between the two parties, with Reckitt retaining a stake and needing to hit certain milestones to generate the full payout. With a lot resting on a successful execution of a deal for the homecare assets this outcome should still 'be a boost to management's credibility,' according to James Edwardes Jones and Wassachon Udomsilpa, RBC analysts. They said it will enable investors to focus more closely on the core Reckitt business in a note to clients. The deal will be financed with about €2 billion ($2.3 billion) of term loans, denominated in euros and dollars, underwritten by a group of banks and it's expected to be syndicated to institutional investors post summer. In March Reckitt said it expects modest sales growth this year as it reshapes the business — a move it said would deliver a significantly stronger performance starting in 2026. The infant formula unit, created by the $17 billion acquisition of Mead Johnson in 2017, remains a sore point for Reckitt. Licht acknowledged last year that the unit, which has been hit by legal woes in the US, hasn't always been a natural fit in the group.
Powys County Times
3 days ago
- Business
- Powys County Times
Reckitt strikes deal worth up to £3.6bn to sell Cillit Bang business
Private equity firm Advent International will buy a 70% stake in Reckitt's essential home cleaning products business, which also includes brands such as Air Wick, Woolite, Resolve, Sole and Easy-Off, as well as around 75 other brands across more than 70 markets. Reckitt will keep a 30% stake in the essential home business after the sale, with up to 1.3 billion dollars (£968 million) deferred under the deal. It will offload six factories, including a site in Derby, to Advent under the deal. The firm will also book around 800 million dollars (£596 million) in costs for splitting out the essential home division from the rest of the business. It expects to complete the deal by the end of the year. Kris Licht, Reckitt chief executive, said: 'We are executing our strategic plan at pace. 'The divestment of Essential Home represents a significant step forward in unlocking the substantial value in our business. '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 power brands.' It put the essential home division, which accounts for about 14% of group net revenues, up for sale last summer as part of a major overhaul. Mr Licht has been leading a plan to restructure Reckitt, unveiling aims last year to spin off its baby formula business, Mead Johnson, and sell the essential home division to focus on 'power brands', such as Durex condoms, Gaviscon antacid and Strepsils lozenges. The essential home business delivered around £2 billion of net revenues in 2024 and it made underlying earnings of £486 million in the year to March. Reckitt said the sale would help further boost shareholder returns, with it set to pay out a 2.2 billion dollar (£1.6 billion) special dividend to investors. The group added it plans to offset the costs of spinning off the division under wider aims to cut costs across the firm. Shares in Reckitt lifted 2% in morning trading on Friday. Ranjan Sen, managing partner of Advent said: 'The carve-out represents a unique opportunity to create a focused, scaled platform of globally recognised home care brands that operate in attractive categories. 'We are confident we can build on the portfolio's strong foundations to drive operational excellence and unlock the brands' full potential.'
Glasgow Times
3 days ago
- Business
- Glasgow Times
Reckitt strikes deal worth up to £3.6bn to sell Cillit Bang business
Private equity firm Advent International will buy a 70% stake in Reckitt's essential home cleaning products business, which also includes brands such as Air Wick, Woolite, Resolve, Sole and Easy-Off, as well as around 75 other brands across more than 70 markets. Reckitt will keep a 30% stake in the essential home business after the sale, with up to 1.3 billion dollars (£968 million) deferred under the deal. It will offload six factories, including a site in Derby, to Advent under the deal. The firm will also book around 800 million dollars (£596 million) in costs for splitting out the essential home division from the rest of the business. It expects to complete the deal by the end of the year. Kris Licht, Reckitt chief executive, said: 'We are executing our strategic plan at pace. 'The divestment of Essential Home represents a significant step forward in unlocking the substantial value in our business. '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 power brands.' It put the essential home division, which accounts for about 14% of group net revenues, up for sale last summer as part of a major overhaul. Mr Licht has been leading a plan to restructure Reckitt, unveiling aims last year to spin off its baby formula business, Mead Johnson, and sell the essential home division to focus on 'power brands', such as Durex condoms, Gaviscon antacid and Strepsils lozenges. The essential home business delivered around £2 billion of net revenues in 2024 and it made underlying earnings of £486 million in the year to March. Reckitt said the sale would help further boost shareholder returns, with it set to pay out a 2.2 billion dollar (£1.6 billion) special dividend to investors. The group added it plans to offset the costs of spinning off the division under wider aims to cut costs across the firm. Shares in Reckitt lifted 2% in morning trading on Friday. Ranjan Sen, managing partner of Advent said: 'The carve-out represents a unique opportunity to create a focused, scaled platform of globally recognised home care brands that operate in attractive categories. 'We are confident we can build on the portfolio's strong foundations to drive operational excellence and unlock the brands' full potential.'
