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Reckitt has sold its Essential Home cleaning products business to private equity firm Advent International at an enterprise value of up to $4.8bn, as the consumer goods group moves to refocus its portfolio on faster-growing brands.
Reckitt will retain a 30 per cent stake in the division under the terms of the deal agreed with Advent. The FTSE 100 company plans to return about $2.2bn of the sale proceeds to shareholders via a special dividend. Reckitt’s shares rose 2 per cent in early trading on Friday.
The process to sell the division — which includes brands such as Cillit Bang and Air Wick — was complicated by the market volatility unleashed by US President Donald Trump’s tariffs in the spring.
In total, the deal includes up to $1.3bn of contingent and deferred payments. Roughly $400mn of the consideration is contingent on the division’s future operating performance.
The outcome of the sale process was “disappointing” for Reckitt shareholders, according to analysts at Jefferies, who pointed to the “lack of a clean exit” and a price tag that was up to £1bn lower than hoped for.
Analysts at RBC Capital Markets said that, while the proceeds and structure of the deal were “underwhelming”, the agreement “should be a boost to management’s credibility, quite a lot of which was resting on a successful execution of this deal”.
The cleaning products unit generated about £2bn of net revenues and £490mn of adjusted operating profit in 2024.
Kris Licht, Reckitt’s chief executive, said in a statement that the sale “represents a significant step forward in unlocking the substantial value in our business” and it will enable Reckitt to “focus on a core portfolio of high-growth, high-margin Powerbrands”.
Advent managing partner Ranjan Sen said the carve-out “represents a unique opportunity to create a focused, scaled platform of globally recognised home care brands that operate in attractive categories with structural growth tailwinds”.
The deal is expected to complete by the end of December.
