Research Update: Perrigo Co. PLC 'BBB-' Rating Affirmed On Generics Divestiture; Outlook Revised To Negative

Perrigo Co. PLC announced it entered into a definitive agreement to divest its generic prescription pharmaceutical business (GRx) to Altaris Capital Partners LLC for $1.55 billion, narrowing the business to a global provider of consumer self-care products. With pro forma cash of over $2 billion, pro forma adjusted net debt to EBITDA is in the low-2x area; however, the company intends to use proceeds primarily to fund acquisitions that will likely increase net debt to EBITDA. S&P Global Ratings is affirming its 'BBB-' long-term credit rating on Perrigo and revising the outlook to negative from stable. Our negative outlook reflects our expectation for solid results from the core business, but the potential for acquisitions that could drive adjusted debt to

...- Perrigo Co. PLC announced it entered into a definitive agreement to divest its generic prescription pharmaceutical business (GRx) to Altaris Capital Partners LLC for $1.55 billion, narrowing the business to a global provider of consumer self-care products. - With pro forma cash of over $2 billion, pro forma adjusted net debt to EBITDA is in the low-2x area; however, the company intends to use proceeds primarily to fund acquisitions that will likely increase net debt to EBITDA. - S&P Global Ratings is affirming its '###-' long-term credit rating on Perrigo and revising the outlook to negative from stable. - Our negative outlook reflects our expectation for solid results from the core business, but the potential for acquisitions that could drive adjusted debt to EBITDA above 3x in the next 24 months while material litigation is pending....

Research Update