Private equity giant Advent International has called in Kirkland & Ellis for its acquisition of the home care unit of British multinational Reckitt, repped by Slaughter and May.
The sale of Essential Home – valued at $4.8bn – marks a major step in Reckitt’s drive to revamp its portfolio and focus on core brands like Dettol and Strepsils that form the bulk of its sales.
The Kirkland deal team acting for Advent is led by corporate partners Adrian Maguire, Vincent Bergin, Dan Clarke and Claire Rushton. Between them the partners have acted for the private equity giant in a number of recent transactions, including the £2.7bn sale of UK parcel delivery company Evri to Apollo and the $650m sale of ship management company V Group to Star Capital last year.
Meanwhile the Slaughters team acting for Reckitt is led by corporate partners James Cook, Simon Tysoe and Richard Smith, co-head of the firm’s corporate and M&A group. Smith and Tysoe also counselled Reckitt in 2021 when it offloaded the infant formula business in China it had bought from Mead Johnson in 2017 to local private equity firm Primavera for $2.2bn.
The sale of its Essential Home unit comes as Reckitt considers options for the remainder of its Mead Johnson infant formula business, which has faced legal issues in the US related to the alleged health risks to babies from consuming Enfamil Premature 24 infant formula that has weighed on the group’s share price.
The Essential Home unit includes household names like Calgo and Cillit Bang and generated around £2bn of net revenue in 2024, roughly 14% of Reckitt’s total.
Reckitt will retain a 30% equity stake in the business as part of the deal, which is expected to complete by the end of 2025.
Kris Licht, Reckitt’s chief executive officer, said the deal was a “significant step forward” in unlocking the value in the business.
“This moves Reckitt towards becoming a simpler, more effective consumer health and hygiene company and it will enable us to focus on a core portfolio of high-growth, high-margin powerbrands,” Licht said. “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.”
Advent managing partner Ranjan Sen added the carve-out was “a unique opportunity” to build a platform of globally recognised home care brands.
Goldman Sachs International and Morgan Stanley & Co. International are acting as lead financial advisers to Reckitt on the deal, with Robey Warshaw also providing financial advice.
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