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Perrigo dishes out $2.1B for HRA Pharma, a big step on its quest to become self-care heavyweight

September 9, 2021 Noah Higgins-Dunn


On a quest to become a leading consumer self-care company, Perrigo finally sold off its generic prescription business earlier this year and filled its coffers with extra M&A cash. Now, the company is putting that money to use.

Perrigo will dish out €1.8 billion (roughly $2.1 billion) in cash for consumer self-care company Héra SAS, or HRA Pharma, the company announced on Thursday. With the buyout, Perrigo will pick up HRA’s three leading consumer meds in blister care, women’s health and scar care. 

To Perrigo, the HRA acquisition is seen as “the crowning achievement” in its multi-year  transformation into a “focused and high-performing consumer self-care company,” CEO Murray Kessler said in a release. The buyout is expected to close by the end of the first half of 2022, Perrigo said. 

To Jefferies analysts, the deal looks “attractive strategically and financially,” according to a client note sent on Thursday. HRA’s net sales growth is expected to land in the mid-teens over the next several years through additional launches and increased prescription to over-the-counter (OTC) product swaps, Jefferies points out. 

Even more, Perrigo’s top brass expect the transaction to immediately pay out €400 million (roughly $472 million) in sales by 2023, a boost to the company as it aims for 3% annual revenue growth. 

Except Perrigo will have to prove that it can sustain growing sales for some time to come given the company’s recent struggles, the Jefferies analysts said. The company had previously posted a negative annual growth rate since 2015, up until its $750 million buyout of Ranir in 2019, according to the note.

“That said, overall we are positive on the HRA transaction, and it could well prove to be a prudent short-term deployment of capital,” Jefferies said. 

RELATED: Perrigo’s generics split is back on the docket, thanks to $1.55B Altaris offer

Perrigo has faced a bumpy road on its journey to focus on consumer self-care products. In late 2019, the company was forced to postpone the planned sell off of its lagging prescription generics business before finally landing a suitor in Altaris Capital Partners for $1.55 billion. 

With that deal, Altaris picked up Perrigo’s “extended topical” medications, like creams, foams, mousses, gels, liquids and inhalable products—including a copycat of Teva’s ProAir HFA inhaler. 

Now, with Perrigo’s HRA deal, it will stash its over-the-counter portfolio with Compeed, used to treat blisters, bunions, calluses, corns, cracked heels and cold sores. Perrigo will also pick up ellaOne, an emergency contraception pill, and Mederma, which is used to treat scars, stretch marks and cold sores. 

RELATED: Perrigo, Catalent get generic of Teva inhaler approved on 4th go-round

About 15% of HRA’s sales are also derived from its prescribed rare disease drugs, Metopirone, Ketoconazole HRA and Lysodren. 

What’s appealing to Perrigo, however, has been HRA’s ability to switch its products from prescription to over-the-counter, executives said. Case in point: HRA’s recent U.K. nod for Hana as a once-daily OTC oral contraceptive, the first approval of its kind, Perrigo said. 

“It’s literally a one-of-a-kind opportunity to simultaneously enhance our financial profile, while driving even greater value for consumers, shareholders and the communities in which we work and live,” Kessler said. 



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