STERIS to divest its dental segment to Peak Rock Capital for $787 million

por HealthCare Business News | April 15, 2024
Business Affairs
STERIS Centre of Excellence (Courtesy: STERIS)
STERIS plc, a global leader in infection prevention and other healthcare products, has announced a definitive agreement to sell its dental segment to Peak Rock Capital for $787.5 million.

The decision comes after STERIS acquired the segment through the purchase of Cantel, which then saw the integration of lean manufacturing techniques to enhance efficiency. Dan Carestio, president and chief executive officer of STERIS, noted in a statement that the sale will allow the company to concentrate more fully on its core markets including healthcare, pharmaceuticals, and medtech.

The dental segment, which reported $407 million in revenue and $86 million in operating income for the past twelve months ending December 31, 2023, will now be classified as discontinued operations for fiscal 2024.

Proceeds from the sale are primarily earmarked for debt repayment, with STERIS projecting an approximate $0.35 per diluted share decrease in interest expenses annually.

The closing of the transaction is contingent on regulatory approvals and other standard conditions. Guggenheim Securities and Jones Day are serving as financial advisor and legal counsel, respectively, for this transaction.

This strategic divestiture aligns with STERIS’s objective to optimize its product and service offerings across its primary markets, thereby enhancing overall customer focus and operational efficiency. The company will provide an updated outlook for fiscal 2025 following the release of its fourth quarter fiscal 2024 results.

The transaction, set to close in the first quarter of fiscal 2025, also includes a potential additional earnout of $12.5 million dependent on specific revenue targets.

Last year, STERIS acquired the surgical instrumentation platform from BD (Becton, Dickinson and Company) for $540 million.

Peak Rock Capital acquired third-party imaging services company 626 Holdings in 2022.

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