Steris PLC (NYSE: STE) has announced a definitive agreement to sell its dental segment to Peak Rock Capital for $787.5 million. The transaction, structured as an equity sale, also includes the possibility of an additional earnout of up to $12.5 million based on the dental segment's performance in fiscal 2025.
The dental segment reported revenue of $407 million and segment operating income of $86 million in the trailing twelve-month period ended December 31, 2023. Steris intends to use the proceeds primarily to repay debt, expecting a resulting benefit of approximately $0.35 per diluted share on a full-year run rate basis.
Following this divestiture, Steris plans to focus on its core markets in healthcare, pharma, and medtech, aiming to provide a more comprehensive portfolio of products and services to its customers in these areas.
The company has also stated that the dental segment will be reported as discontinued operations for the fourth quarter and full year of fiscal 2024, and that it will provide an outlook for fiscal 2025 reflecting this transaction when fourth-quarter fiscal 2024 results are issued.
Guggenheim Securities is serving as the financial advisor and Jones Day as legal counsel to Steris for the transaction.
Steris, a leading global provider of products and services supporting patient care, emphasizes infection prevention and aims to create a healthier and safer world by offering innovative healthcare, life sciences, and dental products and services. Following these announcements, the company's shares moved -0.4%, and are now trading at a price of $208.31. For the full picture, make sure to review STERIS's 8-K report.
