) - STERIS plc (NYSE: STE) (“STERIS” or the “Company”) today
announced that the Company has entered into a definitive agreement
to divest its Dental segment to Peak Rock Capital, a leading
middle-market private investment firm, for $787.5 million (the
“Transaction”). The Transaction is structured as an equity sale.
The Transaction terms also include the opportunity for STERIS to
receive an additional earnout of up to $12.5 million, subject to
the achievement of certain revenue targets of the Dental segment in
fiscal 2025. The Dental segment reported revenue of $407 million
and contributed segment operating income of $86 million in the
trailing twelve-month period ended December 31, 2023.
“Since acquiring our Dental segment through the Cantel
acquisition, we have focused on deploying lean manufacturing
methods to drive operating efficiencies. We have been impressed
with the strength of the team, their willingness to adopt lean
philosophies, and the leadership position the business has with
Customers,” said Dan Carestio, President and Chief Executive
Officer of STERIS. “After a thorough review of strategic
alternatives, we have decided to divest our Dental segment to allow
us to focus on our Customers within our core markets in healthcare,
pharma and MedTech who can most benefit from our full portfolio of
products and services. We are confident this business will do well
with the investment and support of Peak Rock Capital.”
The Transaction is subject to customary closing conditions,
including regulatory review, and is anticipated to close in the
first quarter of fiscal year 2025. STERIS intends to use the
proceeds primarily to repay debt. On a full year run rate basis,
STERIS expects the resulting benefit of the reduction in interest
expense to be approximately $0.35 per diluted share.
The Dental segment will be reported as discontinued operations
for the fourth quarter and full year of fiscal 2024. The Company
will provide outlook for fiscal 2025 reflecting this Transaction
when fourth quarter fiscal 2024 results are issued.
AdvisorsGuggenheim Securities is serving as
financial advisor and Jones Day as legal counsel to STERIS for the
Transaction.
About STERIS STERIS is a leading global
provider of products and services that support patient care with an
emphasis on infection prevention. WE HELP OUR CUSTOMERS CREATE A
HEALTHIER AND SAFER WORLD by providing innovative healthcare, life
sciences and dental products and services. For more information,
visit www.steris.com.
Company Contact: Julie Winter, Vice President,
Investor Relations and Corporate
CommunicationsJulie_Winter@steris.com
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATIONThis release may contain statements concerning
certain trends, expectations, forecasts, estimates, or other
forward-looking information affecting or relating to STERIS or its
industry, products or activities that are intended to qualify for
the protections afforded “forward-looking statements” under the
Private Securities Litigation Reform Act of 1995 and other laws and
regulations. Forward-looking statements speak only as to the date
the statement is made and may be identified by the use of
forward-looking terms such as “may,” “will,” “expects,” “believes,”
“anticipates,” “plans,” “estimates,” “projects,” “targets,”
“forecasts,” “outlook,” “impact,” “potential,” “confidence,”
“improve,” “optimistic,” “deliver,” “orders,” “backlog,”
“comfortable,” “trend”, and “seeks,” or the negative of such terms
or other variations on such terms or comparable terminology. Many
important factors could cause actual results to differ materially
from those in the forward-looking statements including, without
limitation, disruption of production or supplies, changes in market
conditions, political events, pending or future claims or
litigation, competitive factors, technology advances, actions of
regulatory agencies, and changes in laws, government regulations,
labeling or product approvals or the application or interpretation
thereof. Other risk factors are described in STERIS’s other
securities filings, including Item 1A of our Annual Report on Form
10-K for the year ended March 31, 2023. Many of these important
factors are outside of STERIS’s control. No assurances can be
provided as to any result or the timing of any outcome regarding
matters described in STERIS’s securities filings or otherwise with
respect to any regulatory action, administrative proceedings,
government investigations, litigation, warning letters, cost
reductions, business strategies, earnings or revenue trends or
future financial results. References to products are summaries only
and should not be considered the specific terms of the product
clearance or literature. Unless legally required, STERIS does not
undertake to update or revise any forward-looking statements even
if events make clear that any projected results, express or
implied, will not be realized. Other potential risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statements include, without
limitation, (a) the ability to consummate the Transaction on the
expected terms and within the anticipated time period, or at all,
which is dependent on the satisfaction of certain closing
conditions, some of which are outside of STERIS’s control, (b)
STERIS’s ability to realize the expected benefits of the
Transaction, including the earnout payment, (c) the risk that
regulatory approvals that are required to complete the Transaction
may not be received, may take longer than expected or may impose
adverse conditions, (d) the impact of the COVID-19 pandemic or
similar public health crises on STERIS’s operations, supply chain,
material and labor costs, performance, results, prospects, or
value, (e) STERIS's ability to achieve the expected benefits
regarding the accounting and tax treatments of the redomiciliation
to Ireland , (f) operating costs, Customer loss and business
disruption (including, without limitation, difficulties in
maintaining relationships with employees, Customers, clients or
suppliers) being greater than expected, (g) STERIS’s ability to
successfully integrate acquired businesses into its existing
businesses, including unknown or inestimable liabilities,
impairments, or increases in expected integration costs or
difficulties in connection with the integration of such businesses,
(h) uncertainties related to tax treatments under the TCJA and the
IRA, (i) the possibility that Pillar Two Model Rules could increase
tax uncertainty and adversely impact STERIS's provision for income
taxes and effective tax rate and subject STERIS to additional
income tax in jurisdictions who adopt Pillar Two Model Rules, (j)
STERIS's ability to continue to qualify for benefits under certain
income tax treaties in light of ratification of more strict income
tax treaty rules (through the MLI) in many jurisdictions where
STERIS has operations, (k) changes in tax laws or interpretations
that could increase our consolidated tax liabilities, including
changes in tax laws that would result in STERIS being treated as a
domestic corporation for United States federal tax purposes, (l)
the potential for increased pressure on pricing or costs that leads
to erosion of profit margins, including as a result of inflation,
(m) the possibility that market demand will not develop for new
technologies, products or applications or services, or business
initiatives will take longer, cost more or produce lower benefits
than anticipated, (n) the possibility that application of or
compliance with laws, court rulings, certifications, regulations,
or regulatory actions, including without limitation any of the same
relating to FDA, EPA or other regulatory authorities, government
investigations, the outcome of any pending or threatened FDA, EPA
or other regulatory warning notices, actions, requests, inspections
or submissions, the outcome of any pending or threatened litigation
brought by private parties, or other requirements or standards may
delay, limit or prevent new product or service introductions,
affect the production, supply and/or marketing of existing products
or services, result in costs to STERIS that may not be covered by
insurance, or otherwise affect STERIS’s performance, results,
prospects or value, (o) the potential of international unrest,
including the Russia-Ukraine or Israel-Hamas military conflicts,
economic downturn or effects of currencies, tax assessments,
tariffs and/or other trade barriers, adjustments or anticipated
rates, raw material costs or availability, benefit or retirement
plan costs, or other regulatory compliance costs, (p) the
possibility of reduced demand, or reductions in the rate of growth
in demand, for STERIS’s products and services, (q) the possibility
of delays in receipt of orders, order cancellations, or delays in
the manufacture or shipment of ordered products, due to supply
chain issues or otherwise, or in the provision of services, (r) the
possibility that anticipated growth, cost savings, new product
acceptance, performance or approvals, or other results may not be
achieved, or that transition, labor, competition, timing,
execution, impairments, regulatory, governmental, or other issues
or risks associated with STERIS’s businesses, industry or
initiatives including, without limitation, those matters described
in STERIS's various securities filings, may adversely impact
STERIS’s performance, results, prospects or value, (s) the impact
on STERIS and its operations, or tax liabilities, of Brexit or the
exit of other member countries from the EU, and the Company’s
ability to respond to such impacts, (t) the impact on STERIS and
its operations of any legislation, regulations or orders, including
but not limited to any new trade or tax legislation (including CAMT
and excise tax on stock buybacks), regulations or orders, that may
be implemented by the U.S. administration or Congress, or of any
responses thereto, (u) the possibility that anticipated financial
results or benefits of recent acquisitions, of STERIS’s
restructuring efforts, or of recent divestitures, including
anticipated revenue, productivity improvement, cost savings, growth
synergies and other anticipated benefits, will not be realized or
will be other than anticipated, (v) the level of STERIS’s
indebtedness limiting financial flexibility or increasing future
borrowing costs, (w) rating agency actions or other occurrences
that could affect STERIS’s existing debt or future ability to
borrow funds at rates favorable to STERIS or at all, and (x) the
effects of changes in credit availability and pricing, as well as
the ability of STERIS’s Customers and suppliers to adequately
access the credit markets, on favorable terms or at all, when
needed.
STERIS (NYSE:STE)
Historical Stock Chart
From Aug 2024 to Sep 2024
STERIS (NYSE:STE)
Historical Stock Chart
From Sep 2023 to Sep 2024