PERRIGO ANNOUNCES THE CLOSING OF A SENIOR NOTES OFFERING BY ITS FINANCE SUBSIDIARY, PERRIGO FINANCE UNLIMITED COMPANY

Rhea-AI Summary

Perrigo Company plc (NYSE: PRGO) announced the closing of a registered public offering by its indirect wholly-owned finance subsidiary, Perrigo Finance Unlimited Company. The offering includes $715 million of 6.125% Senior Notes due 2032 and €350 million of 5.375% Senior Notes due 2032. The total net proceeds are estimated at approximately $1,076 million after fees and expenses.

Perrigo plans to use the proceeds to redeem all of its 4.375% Senior Notes Due 2026 and prepay a portion of the Term B Loans under its credit facilities. The Notes will be fully guaranteed by Perrigo and its subsidiaries that provide guarantees under Perrigo's credit facilities. BofA Securities, J.P. Morgan, Wells Fargo Securities, Morgan Stanley, and HSBC are involved as joint book-running managers for the offering.

Positive

• Successful closing of a $1,076 million senior notes offering
• Refinancing of existing debt with potentially more favorable terms
• Strong investor interest indicated by the size of the offering

Negative

• Increase in long-term debt obligations
• Potential increase in interest expenses due to higher interest rates on new notes

Insights

Financial Analyst

Perrigo's debt refinancing through this $1,076 million senior notes offering is a strategic move to optimize its capital structure. The new notes, with 6.125% and 5.375% interest rates for USD and Euro respectively, will replace the 4.375% 2026 Notes. This higher interest rate reflects the current market conditions and Perrigo's credit profile.

While this refinancing extends the debt maturity, it also increases interest expenses, potentially impacting future earnings. The partial prepayment of Term B Loans suggests a focus on reducing more expensive debt. Investors should monitor how this impacts Perrigo's leverage ratios and interest coverage in upcoming quarters.

Market Research Analyst

This refinancing demonstrates Perrigo's proactive approach to managing its debt profile amidst rising interest rates. The company's ability to secure $715 million in USD and €350 million in Euro notes indicates strong investor confidence in its long-term prospects. The involvement of major financial institutions as joint book-running managers further validates this confidence.

However, the higher interest rates on the new notes compared to the 2026 Notes being redeemed may put pressure on Perrigo's profitability. Investors should assess how this impacts the company's financial flexibility and its ability to invest in growth initiatives or return value to shareholders through dividends or share buybacks.

DUBLIN, Sept. 17, 2024 /PRNewswire/ -- Perrigo Company plc ("Perrigo" or the "Company") (NYSE: PRGO) today announced the closing of a registered public offering by Perrigo Finance Unlimited Company, an indirect wholly-owned finance subsidiary of Perrigo (the "Issuer"), of $715 million aggregate principal amount of the Issuer's 6.125% Senior Notes due 2032 (the "USD Notes") and €350 million aggregate principal amount of the Issuer's 5.375% Senior Notes due 2032 (the "Euro Notes" and together with the USD Notes, the "Notes"). The Notes will be fully and unconditionally guaranteed on a senior unsecured basis by Perrigo and its subsidiaries that provide guarantees under Perrigo's credit facilities.

Perrigo estimates that the total net proceeds of the offering will be approximately $1,076 million, after underwriting fees and offering expenses payable by the Issuer.

Perrigo intends to use the net proceeds of the Notes offering to fund the redemption of all of the Issuer's 4.375% Senior Notes Due 2026 (the "2026 Notes") and prepay a portion of the Term B Loans outstanding under Perrigo's credit facilities and to pay fees and expenses in connection with the foregoing.

BofA Securities, J.P. Morgan, Wells Fargo Securities, Morgan Stanley and HSBC are the joint book-running managers for the USD Notes. BofA Securities, HSBC and J.P. Morgan are the active joint book-running managers for the Euro Notes.

The offering is being made pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission. The offering will be made only by means of a prospectus supplement relating to the offering and the accompanying base prospectus, copies of which may be obtained by contacting BofA Securities, NC1-004-03-43, 200 North College Street, 3rd floor, Charlotte NC  28255-0001, Attn: Prospectus Department at dg.prospectus_requests@bofa.com or toll-free at (800) 294-1322.

About Perrigo

Perrigo Company plc (NYSE: PRGO) is a leading provider of Consumer Self-Care Products and over-the-counter (OTC) health and wellness solutions that enhance individual well-being by empowering consumers to proactively prevent or treat conditions that can be self-managed.  

Perrigo Contact

Bradley Joseph, Vice President, Global Investor Relations & Corporate Communications,
(269) 686-3373 / bradley.joseph@perrigo.com

Nicholas Gallagher, Senior Manager, Global Investor Relations & Corporate Communications, (269) 686-3238 / nicholas.gallagher@perrigo.com

No Offer or Solicitation

This press release does not constitute an offer to sell, or an invitation to subscribe for, purchase or exchange, any securities, nor shall there be any sale, issuance, exchange or transfer of the securities referred to in this announcement in any jurisdiction in contravention of applicable law. This press release is not a notice of redemption with respect to the 2026 Notes.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this press release are "forward-looking statements." These statements relate to future events or the Company's future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "forecast," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential" or the negative of those terms or other comparable terminology. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company's control. Risks and uncertainties include risks relating to the successful completion of the transactions contemplated herein, supply chain impacts on the Company's business, including those caused or exacerbated by armed conflict, trade and other economic sanctions and/or disease; general economic, credit, and market conditions; the impact of the war in Ukraine and any escalation thereof, including the effects of economic and political sanctions imposed by the United States, United Kingdom, European Union, and other countries related thereto; the outbreak or escalation of conflict in other regions where we do business; current and future impairment charges, including those related to the sale of the Héra SAS ("HRA Pharma") Rare Diseases Business, if we determine that the carrying amount of specific assets may not be recoverable from the expected future cash flows of such assets; customer acceptance of new products; competition from other industry participants, some of whom have greater marketing resources or larger market shares in certain product categories than the Company does; pricing pressures from customers and consumers; resolution of uncertain tax positions and any litigation relating thereto, ongoing or future government investigations and regulatory initiatives; uncertainty regarding the Company's ability to obtain and maintain its regulatory approvals; potential costs and reputational impact of product recalls or sales halts; potential adverse changes to U.S. and foreign tax, healthcare and other government policy; the effect of epidemic or pandemic disease; the timing, amount and cost of any share repurchases (or the absence thereof) and/or any refinancing of outstanding debt at or prior to maturity; fluctuations in currency exchange rates and interest rates; the Company's ability to achieve benefits expected from its sale of the HRA Rare Diseases Business, including potential earnout payments, and the risk that potential costs or liabilities incurred or retained in connection with that transaction may exceed the Company's estimates or adversely affect the Company's business or operations; and the risk that potential costs or liabilities incurred or retained in connection with the sale of the Company's RX business transaction may exceed the Company's estimates or adversely affect the Company's business or operations; the Company's ability to achieve the benefits expected from the acquisitions of HRA Pharma and Nestlé's Gateway infant formula plant along with the U.S. and Canadian rights to the GoodStart® infant formula brand and other related formula brands ("Gateway") and/or the risks that the Company's synergy estimates are inaccurate or that the Company faces higher than anticipated integration or other costs in connection with the acquisitions; risks associated with the integration of HRA Pharma and Gateway, including the risk that growth rates are adversely affected by any delay in the integration of sales and distribution networks; the consummation and success of other announced and unannounced acquisitions or dispositions, and the Company's ability to realize the desired benefits thereof; and the Company's ability to execute and achieve the desired benefits of announced cost-reduction efforts and other strategic initiatives and investments, including the Company's ability to achieve the expected benefits from its ongoing restructuring programs described herein. Adverse results with respect to pending litigation could have a material adverse impact on the Company's operating results, cash flows and liquidity, and could ultimately require the use of corporate assets to pay damages, reducing assets that would otherwise be available for other corporate purposes. These and other important factors, including those discussed under "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, as well as the Company's subsequent filings with the United States Securities and Exchange Commission, may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. The forward-looking statements in this press release are made only as of the date hereof, and unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

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SOURCE Perrigo Company plc

FAQ

What is the total value of Perrigo's (PRGO) recent senior notes offering?

Perrigo's (PRGO) recent senior notes offering has a total estimated net proceeds of approximately $1,076 million, consisting of $715 million in USD Notes and €350 million in Euro Notes.

What are the interest rates and maturity dates for Perrigo's (PRGO) new senior notes?

Perrigo's (PRGO) new senior notes include 6.125% USD Notes due 2032 and 5.375% Euro Notes due 2032.

How does Perrigo (PRGO) plan to use the proceeds from its recent senior notes offering?

Perrigo (PRGO) intends to use the proceeds to redeem all of its 4.375% Senior Notes Due 2026 and prepay a portion of the Term B Loans outstanding under its credit facilities.

Which financial institutions are acting as joint book-running managers for Perrigo's (PRGO) senior notes offering?

BofA Securities, J.P. Morgan, Wells Fargo Securities, Morgan Stanley, and HSBC are acting as joint book-running managers for Perrigo's (PRGO) senior notes offering.