Prestige Consumer Expands Portfolio with $1.045B Breathe Right Deal

Edgen Stock·Mar 20 2026, 10:42

Share to

Share to

Copy link

Key Takeaways

Prestige Consumer Healthcare is set to acquire the Breathe Right brand for $1.045 billion, a strategic move to enter the growing sleep and wellness market. The deal, expected to close in the first half of fiscal 2027, will be financed through cash and debt, but management anticipates it will boost margins and earnings per share.

Strategic Expansion: Prestige will pay $1.045 billion to acquire Breathe Right and other brands like Dimetapp®, entering the nasal strip and children's cold relief categories.
Financial Impact: The acquisition is projected to be accretive to gross margin, EBITDA margin, and EPS, with a net cost of approximately $900 million after tax benefits.
Debt Financing: The deal will be funded by cash and a new term loan, with the company aiming for rapid deleveraging through increased free cash flow generated by the new brands.

Prestige Pays $1.045B to Enter Nasal Strip Market

Prestige Consumer Healthcare (NYSE: PBH) will acquire the Breathe Right brand from Foundation Consumer Healthcare in a $1.045 billion transaction announced on March 20, 2026. The net cost to Prestige is approximately $900 million after factoring in an anticipated $150 million in tax benefits. This acquisition gives Prestige a leading position in a new category, as Breathe Right is the #1 brand in the nasal strip market. The deal also includes other established brands, such as the children's cough and cold relief brand Dimetapp, further diversifying Prestige's portfolio into the attractive sleep and better-breathing consumer health segments.

Acquisition Expected to Boost Margins and EPS

Prestige plans to finance the purchase using a combination of cash on hand and a new term loan credit facility. Despite the new debt, the company's leadership projects the acquisition will be financially advantageous, forecasting it to be accretive to gross margin, EBITDA margin, and earnings per share (EPS). The company expects the deal to generate significant free cash flow, enabling swift repayment of the new debt. Ron Lombardi, CEO of Prestige, highlighted the strategic fit, stating the acquisition aligns with the company's asset-light business model.

Financially, the acquisition is highly attractive with strong margins, and we anticipate it to be accretive to gross and EBITDA margins as well as to EPS. These attributes are expected to drive incremental free cash flow that will enable rapid deleveraging.

— Ron Lombardi, Chairman, President, and CEO of Prestige Consumer Healthcare.

The transaction is expected to close during the first half of fiscal 2027, subject to regulatory clearance under the Hart-Scott-Rodino Act.