Consumer giant Reckitt Benckiser has sold its Essential Home business to a private equity firm in a deal worth up to $4.8billion.
The FTSE 100 firm is selling the unit, which includes brands like Air Wick and Cillit Bang, as part of Reckitt's efficiency drive launched earlier this year that will see it focus efforts on its core business.
Reckitt is also exploring options for Mead Johnson Nutrition, which remains the subject of US litigation regarding its infant formula.
The group, which also owns healthcare brands like Durex and Clearasil, told shareholders on Friday Essential Home would be sold to Advent International for an enterprise value of ‘up to $4.8billion’, with Reckitt retaining a 30 per cent stake in the business.
Reckitt Essential Home operates in more than 70 markets in the air care, surface, pest and laundry segments, and generated £2billion of net revenue in 2024.
Reckitt's interest in six global manufacturing plants will transfer with Essential Home, including the UK site in Derby.
The deal, the value of which is equivalent to 7.7x Essential Home's unaudited adjusted operating profit for last year, includes up to $1.3billion of contingent and deferred consideration.
And investors are set to be rewarded, with Reckitt lining up a $2.2billion special dividend on top of the group’s ongoing share buyback programme.
Expected to complete by the end of the year, the deal will see Reckitt face costs of roughly $800million with the majority payable in 2026.
Reckitt boss Kris Licht 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 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.’
Advent managing partner Ranjan Sen said the deal ‘represents a unique opportunity to create a focused, scaled platform of globally recognised home care brands that operate in attractive categories with structural growth tailwinds’.
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