City snapshot: KKR nears €2.5bn deal for Karo Healthcare

Private equity giant KKR is reportedly close to buying E45 maker Karo Healthcare in a deal worth over €2.5bn.

KKR beat out bids from other rival private equity firms after Karo’s owner EQT began looking for a buyer last year, sources told Bloomberg.

Under EQT’s ownership, Karo has acquired several consumer medicine brands including the E45 moisturiser brand from Reckitt Benckiser in 2021 and the athlete’s foot cream Lamisil from Haleon in 2023.

An announcement on KKR’s buyout could come as soon as this week although deliberations are in their final stages and could still fall apart.

A deal would be counter to the downbeat mood following Donald Trump’s decision to place tariffs on almost every country. This has put dealmaking on hold while investors assess the outlook of the world economy.

The consumer-health sector is attractive to private equity because it offers steady cash flows even during economic downturns.

KKR has over $600bn under management with investments including Flora Food Group and hair care firm Wella.

Stockholm-based Karo sells products in over 90 countries with annual revenue over €500m. Its brands include stretch mark cream Remescar and vitamin brand Nutravita.