Medical device company Steris has signed a definitive agreement for the sale of its dental segment, HuFriedyGroup, to an affiliate of Peak Rock Capital, for $787.5m.

The transaction also includes a potential additional earnout of up to $12.5m, contingent on the Dental segment meeting specific revenue targets in fiscal 2025.

Established in 1908, HuFriedyGroup offers a range of instruments, infection prevention products, conscious sedation products and management systems for the dental industry.

The company, with a workforce of approximately 1,500 employees, operates in nearly 100 countries and has more than 20 global manufacturing facilities.

The sale is structured as an equity transaction.

Subject to standard closing conditions, including regulatory approvals, the transaction is planned for completion in the first quarter of fiscal 2025.

For the 12 months ending 31 December 2023, HuFriedyGroup reported a revenue of $407m and an operating income of $86m.

Steris plans to utilise the proceeds from this divestiture primarily to reduce its debt.

Steris president and CEO Dan Carestio said: “Since acquiring our Dental segment through the Cantel acquisition, we have focused on deploying lean manufacturing methods to drive operating efficiencies.

“After a thorough review of strategic alternatives, we have decided to divest our Dental segment to allow us to focus on our customers within our core markets in healthcare, pharma and medtech who can most benefit from our full portfolio of products and services. We are confident this business will do well with the investment and support of Peak Rock Capital.”

Steris said that the dental segment will be classified as discontinued operations in its financial statements for the fourth quarter and the entire fiscal year 2024.

Last year, Steris acquired surgical instrumentation, laparoscopic instrumentation and sterilisation container assets from BD.