Research Update: Perrigo Co. PLC Ratings Placed On CreditWatch Negative On Potentially Weaker Metrics Due To Announced Initiatives

Perrigo Co. PLC's infant nutrition business is taking longer than expected to stabilize, which led management to announce a remediation plan for the segment, as well as a new global restructuring initiative. These initiatives are in addition to the company's existing Supply Chain Reinvention Program (SCRP). We anticipate Perrigo will spend a total of $200 million on these initiatives in 2024, which will weigh on its credit ratios, including its S&P Global Ratings-adjusted leverage (we estimate about 5x as of Dec. 31, 2023. While the company's fourth-quarter results met our expectations, its implementation of a new remediation and restructuring program signals a need to further reposition its business after several years of transformation. These developments, which are a deviation from

...- Perrigo Co. PLC's infant nutrition business is taking longer than expected to stabilize, which led management to announce a remediation plan for the segment, as well as a new global restructuring initiative. These initiatives are in addition to the company's existing Supply Chain Reinvention Program (SCRP). We anticipate Perrigo will spend a total of $200 million on these initiatives in 2024, which will weigh on its credit ratios, including its S&P Global Ratings-adjusted leverage (we estimate about 5x as of Dec. 31, 2023. - While the company's fourth-quarter results met our expectations, its implementation of a new remediation and restructuring program signals a need to further reposition its business after several years of transformation. These developments, which are a deviation from our current expectations, require further analysis. - Therefore, we placed all of our ratings on Perrigo Co. PLC on CreditWatch with negative implications. - Resolution of the CreditWatch placement will...

Research Update