Acquiring Success: Analyzing Perrigo’s Journey of Strategic Growth

Topic: Serial Acquirers Reading Time: 6 min

The Company

Perrigo Company plc is a global consumer self-care company dedicated to making lives better by bringing high-quality and affordable self-care products to customers worldwide. Founded in 1887, Perrigo has its roots deeply planted in Allegan, Michigan, USA. Over the years, it has grown and evolved, shifting its headquarters to Dublin, Ireland, to better leverage global market opportunities and tax advantages.

Perrigo operates primarily in the healthcare sector, with a particular focus on over-the-counter (OTC) healthcare products and nutritional offerings. Their vast portfolio includes a range of products from pain relievers and cough, cold, and allergy treatments to skincare, oral care, and vitamins. The company’s mission revolves around providing “Quality Affordable Healthcare Products®” and making self-care accessible to a broader audience.

Acquisition History of The Company

Perrigo’s growth strategy has been heavily influenced by its aggressive acquisition approach. The company has a robust history of acquisitions aimed at expanding its product offerings, entering new markets, and enhancing its competitive position. Over the past several decades, Perrigo has acquired numerous companies, allowing it to diversify its product lines and enter new geographical territories.

One of the most significant acquisitions in Perrigo’s history was the purchase of Omega Pharma in 2015 for approximately $4.5 billion. Omega Pharma, a leading OTC healthcare company in Europe, significantly expanded Perrigo’s presence in the European market, making it a global leader in the OTC segment.

In the last five years, Perrigo has continued its acquisition spree, acquiring approximately 10 companies. Last year alone, they acquired three companies, focusing on expanding their capabilities in self-care and healthcare products. The types of companies they target typically include those that offer complementary products, enhance their technological capabilities, or provide access to new markets. This acquisition strategy aligns with Perrigo’s overarching goal of becoming a global leader in self-care.

A noticeable trend in Perrigo’s acquisitions is its focus on companies that strengthen its OTC and self-care product lines. By consistently acquiring businesses that align with these core areas, Perrigo ensures that its growth is not only rapid but also strategic and synergistic with its existing operations.

Acquisition Methods of The Company

Perrigo’s acquisition methods are characterized by thorough due diligence and strategic financial planning. The company typically employs a combination of cash reserves, debt financing, and equity issuance to fund its acquisitions. This balanced approach allows Perrigo to maintain financial flexibility while pursuing its growth objectives.

In terms of financial advisors, Perrigo often collaborates with top-tier investment banks and financial advisory firms to navigate the complexities of large-scale acquisitions. Firms like Goldman Sachs and Morgan Stanley have been known to assist Perrigo in their significant deals, providing both strategic advice and financial structuring services.

Post-merger Integration Approach of The Company

Post-merger integration is a critical aspect of Perrigo’s acquisition strategy. The company has a dedicated internal integration office tasked with overseeing the seamless amalgamation of acquired companies into Perrigo’s existing operations. This office ensures that the integration process aligns with Perrigo’s strategic goals and operational standards.

In addition to its internal resources, Perrigo also collaborates with external integration advisors to facilitate smooth transitions. These advisors bring expertise and an objective perspective that can be crucial in addressing integration challenges and optimizing synergies.

Perrigo’s typical partners for integration include renowned consulting firms like Deloitte and PwC, which provide comprehensive support across various facets of the integration process, from organizational restructuring to IT systems integration and cultural assimilation.

Divestitures of The Company

While Perrigo has a strong track record of successful acquisitions, not all ventures yield the anticipated results. Consequently, the company has also engaged in divestitures to streamline its operations and focus on core areas. Divestitures allow Perrigo to shed non-core or underperforming assets, thereby reallocating resources to more strategic initiatives.

One of Perrigo’s most significant divestitures was the sale of its Rx Pharmaceuticals business in 2021 to private equity firm Altaris Capital Partners for approximately $1.55 billion. This move was strategically aimed at sharpening Perrigo’s focus on its consumer self-care business, aligning with its long-term vision of being a leading global self-care company.

To manage its divestiture processes, Perrigo often engages with specialized advisory firms that provide expertise in evaluating, structuring, and executing these transactions. Firms like Lazard and Evercore have been instrumental in assisting Perrigo with its divestiture activities, ensuring that the transactions are beneficial and aligned with the company’s strategic objectives.

The Future of The Company related to potential other acquisitions

Looking ahead, Perrigo’s future seems poised for continued growth through strategic acquisitions. The company’s clear focus on the self-care market suggests that future acquisition targets will likely include companies that enhance its product portfolio, technological capabilities, and geographical reach within this domain.

Perrigo is expected to continue its pursuit of companies offering innovative self-care solutions, particularly those that align with emerging consumer trends like wellness, natural products, and digital health. Additionally, as the company expands its global footprint, it may seek to acquire businesses in underpenetrated markets, further solidifying its presence worldwide.

Conclusion

Perrigo Company plc stands out as a quintessential example of a serial acquirer in the healthcare sector. With a rich history of strategic acquisitions, robust integration practices, and a forward-looking approach, Perrigo continues to solidify its position as a global leader in self-care. As the company looks to the future, its acquisition strategy will undoubtedly play a pivotal role in shaping its trajectory.

What do you think about Perrigo’s aggressive acquisition strategy? Do you believe this approach will continue to benefit the company in the long term? Share your thoughts and let’s discuss!