Perrigo Acquires Baby Food Maker PBM

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March 30, 2010

Healthcare giant Perrigo Co, has signed a definitive agreement to acquire private-label infant formula and baby foods manufacturer, PBM Holdings Inc., for $808 million in cash.

PBM makes private label baby food for retail giants such as Wal-Mart, Kroger and Target.

“This acquisition positions Perrigo to expand its store brand market leadership into another important product category for our retailers,” said Joseph Papa, Perrigo chairman and CEO. “Just as Perrigo developed the over-the-counter store-brand market over the last several decades, PBM created the store brand value proposition within the highly regulated infant formula space."

The acquisition, expected to close by the end of June, is anticipated to boost Perrigo sales by $300 million in the first full fiscal year with its 370 SKUs, according to a company statement. A key benefit of the acquisition is it “supports Perrigo's long-term growth strategy and adds a substantial adjacent product category to the company’s already diverse [over-the-counter] portfolio,” the company said in a statement.

PBM president and CEO Paul Manning will continue work for the company under Perrigo's ownership.

“We are very excited about joining Perrigo. This merger will provide PBM with a strong base and strategic resources to continue to provide its customers with quality, affordable store branded products,” Manning said. “Both companies have similar missions of partnering with customers to develop superior programs through R&D, marketing and supply chain efficiencies.“

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