Prestige Brands to Divest Three Brands to Moberg Pharma AB

Prestige Brands Holdings, Inc.

revealed that it reached an agreement with Moberg Pharma AB

for the sale of three of its non-core over-the-counter healthcare products for $40.0 million in cash. Prestige Brands said that the transaction included New Skin, PediaCare and Fiber Choice. According to the company, these brands represented approximately $25 million in revenues or 3% of its sales in fiscal 2016. The company indicated that these divestitures would allow it to move closer to its stated objective of having a portfolio consisting of 85% of its revenue from "invest for growth" brands and 15% in "manage for cash" brands to help support long-term organic growth. Prestige Brands said that it intends to use the divestiture proceeds to pay down debt and accelerate de-leveraging. The company expects the transaction to close in the fiscal second quarter that commences on July 1. The stock traded 0.71 percent down on Thursday.