Neogen Seeks To Cut Debt, Streamline Focus With Sale Of Cleaners, Disinfectants Business For $130 Million

Food safety company Neogen Corp NEOG on Monday agreed to sell its global cleaners and disinfectants business to Kersia Group.

Kersia offers biosecurity, disinfection and hygiene solutions.

Deal consideration consists of $130 million in cash at closing plus contingent consideration tied to the future performance of the business.

Neogen says the transaction is expected to be accretive to margins and close in the first quarter of the company’s 2026 fiscal year.

The net proceeds will be used to fully repay the $100 million drawn on the company’s revolving credit facility in the recent term loan refinancing, with the divestiture expected to reduce the company’s net leverage ratio by approximately 0.4x on a pro forma basis.

Also Read: Neogen Q3 Earnings Fall Short On Expectations, Cuts Guidance Amid Macro Headwinds And Tariff Concerns

“The sale of our cleaners and disinfectants business further focuses Neogen on food safety diagnostics and continuing to build on our leadership position in what we believe is an attractive end market with long-term tailwinds,” said John Adent, president and CEO of Neogen.

“The cleaners and disinfectants business has been a strong contributor to our Animal Safety segment and Neogen is committed to a smooth transition for customers, employees and other stakeholders. We expect Kersia’s prioritization of investment and growth in the biosecurity market will benefit the business and provide sharpened strategic focus to maximize its potential for continued growth.”

With approximately $60 million in annual revenue, Neogen’s cleaners and disinfectants are used in a range of livestock applications, including swine, poultry, and ruminant operations.

Earlier this month, Neogen refinanced the remaining $550 million principal of its original $650 million term loan, as well as its revolving credit facility, due in August 2027.

The new $450 million term loan and $250 million revolving credit facility mature in April 2030, extending the previous maturity by over two and a half years.

With an upsizing of the company’s revolving credit facility from $150 million to $250 million and an initial draw of $100 million, the refinancing represents a leverage-neutral transaction.

“We are pleased to complete this refinancing, which not only maintains our current liquidity position and extends the maturity of the term loan and revolving credit facility, but also results in a lower interest rate,” said David Naemura, CFO and COO of Neogen.

NEOG Price Action: Neogen stock is up 4.90% at $4.61 at publication on Monday.

Read Next:

• AstraZeneca- Daiichi Sankyo’s Multi-Billion Dollar Cancer Drug Shows Superior Efficacy Across Broad HER2 Positive Metastatic Breast Cancer Patients

Photo: Shutterstock