Perrigo sells infant formula business to MeridianMade in deal worth up to US$175M

Perrigo has agreed to sell its Infant Formula business to MeridianMade for up to US$175 million, including US$40 million in upfront cash and up to US$135 million in performance-based milestones. 

The divestiture allows Perrigo to reduce capital expenditures, exit discontinued operations, and focus on its core consumer self-care portfolio like vitamins and weight management brands.

MeridianMade will acquire and operate the business to expand its US contract manufacturing platform for store-brand infant nutrition.

Perrigo Company, a consumer self-care products manufacturer, has entered a definitive agreement to sell its Infant Formula business to MeridianMade, an American contract manufacturing platform dedicated to infant nutrition, for a total of up to US$175 million. Closing is expected in the first half of 2027, and the transaction is subject to the satisfaction of customary closing conditions and regulatory approvals.

The transaction consists of US$40 million in cash at closing and up to an additional US$135 million contingent on the achievement of future performance milestones through 2030.

In the trailing four quarters ended June 27, 2026, Perrigo reported that its Infant Formula segment generated net sales of US$380 million and segment adjusted operating income of US$8 million. The company expects this transaction will significantly reduce its future capital expenditure requirements.

Following the divestiture, Perrigo will focus on its core consumer self-care portfolio, which includes dedicated vitamins, minerals, and supplements (VMS) as well as weight management brands, such as Davitamon, Abtei, and XLS-Medical.

“Today’s announcement marks an important milestone in advancing the Streamline pillar of our Three-S plan to Stabilize, Streamline, and Strengthen the business,” says Albert Manzone, interim president and CEO.

Manzone anticipates the transaction will enhance Perrigo’s margin profile, materially reduce expected future capital expenditures, and enable the company to concentrate resources on strengthening its core consumer self-care portfolio.

“Our Infant Formula colleagues have worked with tremendous dedication to enhance performance and improve operations, which has positioned Infant Formula well for its next chapter. We are confident that with its singular focus on infant nutrition and commitment to quality, safety, and continuity, MeridianMade is the right manufacturer to carry this important category forward.”

Closing expected in 2027

Until closing, Perrigo says that it will continue operating its Infant Formula business independent of MeridianMade, with emphasis on maintaining its safety, quality, supply reliability, and customer service.

Perrigo expects its future financial reporting to align more closely with its primary consumer self-care operations, referred to internally as “Core Perrigo.” Its management believes these streamlined financial results will offer investors a clearer picture of the company’s true operational performance and ongoing strategy.

Core Perrigo excludes Infant Formula and certain previously announced divestitures and exited products. The Infant Formula segment will continue to be reported in All In results for the third quarter of 2026.

Beginning in the fourth quarter of 2026, Infant Formula will be included in discontinued operations. In relation to the announced transaction, Perrigo expects to record a non-cash impairment charge in the fourth quarter of 2026 in the range of US$275 to US$375 million.

Goldman Sachs is providing financial advice for the deal and A&O Shearman is serving as Perrigo’s legal advisor. MeridianMade has appointed Jefferies as its financial advisor and Sullivan and Cromwell as its legal advisor.

Review of strategic alternatives

According to Perrigo, the agreement follows its comprehensive review of strategic alternatives for the Infant Formula business and reflects careful consideration of the best path forward for the business and its stakeholders.

Headquartered in New York, US, MeridianMade focuses solely on infant nutrition, backed by infant-grade, domestic infrastructure.

“This acquisition is a commitment to responsible stewardship of store-brand infant formulas, which offer American families a more affordable option for safe, high-quality infant nutrition,” comments Ron Belldegrun, CEO of MeridianMade.

“We look forward to working with the Perrigo team throughout the transition and continuing to support this critical source of infant nutrition.”