Perrigo acquires Nestlé's Gateway Plant and Good Start® Brand in $170 million deal

Perrigo Company plc completed the acquisition of Nestlé’s Gateway infant formula plant in Eau Claire, Wisconsin, and the U.S. and Canadian rights to the Good Start® infant formula brand for $170 million. This investment included a $60 million upgrade to expand the plant’s capacity by an additional 7 million pounds, translating to over 100 million more 8-ounce bottles annually. This expansion was crucial as Perrigo had been unable to meet the demands of its 17 store brand customers and various contract manufacturing clients due to a U.S. infant formula shortage.

The acquisition is part of Perrigo’s Supply Chain Reinvention program, aimed at strengthening its long-term manufacturing strategy and improving the availability of affordable, high-quality infant formula. Murray Kessler, President and CEO of Perrigo, noted that the acquisition was a proactive step to address current and future market demands and would be immediately accretive to Perrigo’s net sales, gross margin, and earnings per share. The deal required no additional borrowings and was pivotal in supporting the lower-priced segment of the North American infant formula market.

Perrigo will continue to manage the Good Start® brand in the U.S. and Canada, while Nestlé will fulfill its existing WIC contracts to ensure uninterrupted supply. The acquisition was recognized by both companies as a strategic move to optimize their focus and resources within the infant nutrition sector.

Deal Type

Merger & Acquisition

Industry

Other

Transaction

$ 170,000,000

Deal Status

Closed

Closing Date

01 November 2022