Bulletin: Perrigo Co. plc Ratings Unaffected By Planned Divestiture Of Generic Business Despite Negative Effects On Diversity

NEW YORK (S&P Global Ratings) Aug. 9, 2018--S&P Global Ratings said today that Perrigo Co. plc's intention to divest its generic pharmaceuticals business is unfavorable from a credit perspective, given the loss in revenue diversity and potential negative synergies. That said, the rating is unaffected because of the continued strength of Perrigo's stand-alone consumer business (over-the-counter [OTC] drugs, international-branded OTC products, and nutrition products) and debt leverage that has steadily improved to the low-2x area. The timing and structuring of the divestment of the prescription drug segment are uncertain, and we do not know the resulting capital structure. However, we currently believe that Perrigo will maintain leverage in the 2x-3x range long-term and that the core OTC business will not

...NEW YORK (S&P Global Ratings) Aug. 9, 2018--S&P Global Ratings said today that Perrigo Co. plc's intention to divest its generic pharmaceuticals business is unfavorable from a credit perspective, given the loss in revenue diversity and potential negative synergies. That said, the rating is unaffected because of the continued strength of Perrigo's stand-alone consumer business (over-the-counter [OTC] drugs, international-branded OTC products, and nutrition products) and debt leverage that has steadily improved to the low-2x area. The timing and structuring of the divestment of the prescription drug segment are uncertain, and we do not know the resulting capital structure. However, we currently believe that Perrigo will maintain leverage in the 2x-3x range long-term and that the core OTC business will not be significantly affected by the divestiture. Perrigo has a strong and established position in the store brand or private-label consumer health care OTC and infant nutritional markets where...

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