Haleon PLC (LSE:HLN, NYSE:HLN), the healthcare company, confirmed the sale of its lip balm brand ChapStick to Suave Brands Company for US$430 million, a company statement revealed.
Suave Brands, a portfolio company of Yellow Wood Partners, will also provide Haleon with a minority stake worth around US$80 million as part of the deal.
It comes as the GSK spinoff looks to streamline its business and focus on core areas.
Brian McNamara, chief executive officer at Haleon, said: “While ChapStick is a great brand, much loved by consumers around the world, it is not a core focus for Haleon. Selling the brand allows us to simplify our business and pay down debt more quickly.
“We're confident the brand will continue to thrive under its new ownership.”
Haleon aims to bring its net debt/adjusted EBITDA ratio to below 3x during 2024, with this figure having been at 3.4x in June 2023.
ChapStick brought in revenues of £112 million for the fiscal year ending on 31 December 2023, the London-listed group revealed.
The sale of the brand is expected to be finalised in the second quarter of 2024, with full details on the deal expected to be detailed in the group’s full-year results at the end of February.
Shares in Haleon traded 0.4% higher on Thursday at around 315p.