Reckitt Benckiser Group has agreed to sell its Essential Home business to private equity firm Advent International for an enterprise value of up to $4.8 billion whilst retaining a 30% equity stake in the divested unit.
Reckitt has struggled with direction in recent years, and the sale is part of its strategy to become a more efficient, world-class consumer health and hygiene business.
The British multinational has been reshaping its portfolio around 11 high-growth, high-margin “Powerbrands” and today’s sale underscores their commitment to developing this core portfolio.
The deal values Essential Home at 7.7 times its unaudited adjusted operating profit for the 12 months ending 31 March 2025. Up to $1.3 billion of the enterprise value comprises contingent and deferred consideration, with Reckitt maintaining its minority stake through Advent’s acquisition vehicle.
The company plans to return excess capital to shareholders through a special dividend of roughly $2.2 billion, accompanied by share consolidation following completion.
The special dividend will complement Reckitt’s ongoing share buyback programme, with the next tranche announcement scheduled alongside H1 2025 results on 24 July 2025.
“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,” said Kris Licht, Reckitt Chief Executive Officer.
“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.”
Reckitt Benckiser shares have gained over the past year, but shares are still substantially below their all-time highs and have been locked in a downtrend since 2017.