Reckitt Benckiser has inked a deal to divest its Essential Home business – including brands such as Cillit Bang and Air Wick – at an enterprise value of up to $4.8bn.
Expected to complete by 31 December 2025, the sale to private equity firm Advent International was a “significant step forward” in Reckitt’s strategic turnaround plan, according to the firm.
Under the terms of the deal, Reckitt will retain a 30% stake in the Essential Home business.
In early 2024, Reckitt had set out a strategy to focus on its core 11 “powerbrands”, including Dettol, Harpic, Nurofen, Strepsils and Durex, and sell off the Essential Home and Mead Johnson Nutrition ranges of cleaning brands and infant formula.
“We are executing our strategic plan at pace,” said Reckitt CEO Kris Licht.
“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 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,” Licht added.
The divested brands – over 80 in total, including Air Wick, Mortein, Calgon and Cillit Bang – generated around 14% of the Reckitt group’s total net revenue.
The deal valued the sold division at 7.7 times its unaudited adjusting operating profit for the 12 months to 31 March 2025.
The sale comes after a tough start to 2025 for Essential Home, with its net revenues declining by 7% in like-for-like terms in the three months to 31 March.
Reckitt expects to incur one-off costs of $0.8bn in the $4.8bn transaction, the total value of which includes up to $1.3bn of contingent and deferred consideration.
Excess capital will be returned to shareholders, with an anticipated special dividend of $2.2bn. Share consolidation will follow completion.
Ranjan Sen, managing partner at Advent, said his team was delighted to work with Reckitt.
He said: “The carve-out represents a unique opportunity to create a focused, scaled platform of globally recognised homecare brands that operate in attractive categories with structural growth tailwinds.
“We are confident we can build on the portfolio’s strong foundations to drive operational excellence and unlock the brands’ full potential. We look forward to working closely with Reckitt and the Essential Home leadership team on this exciting journey.”
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