Perrigo reaches deal with investor to replace five board members

Perrigo announced Tuesday that under an agreement with investor Starboard Value, five new members will be appointed to the drugmaker's board. The new directors include Starboard's CEO Jeffrey Smith, along with Bradley Alford and Jeffrey Kindler, with the shareholder set to name two further independent directors. 

Under the deal, Perrigo's current directors Herman Morris, Shlomo Yanai, Michael Jandernoa and Gary Kunkle will step down immediately. The company added that Ellen Hoffing will step down from the board once the second additional independent director is appointed.

Perrigo chairman Laurie Brlas remarked "we are pleased to have reached this agreement with Starboard and look forward to working closely with the new directors to create value for our shareholders." Meanwhile, Smith commented "I am pleased that we were able to reach a constructive agreement with Perrigo to reconstitute the board with new independent directors, continuing "Brad Alford and Jeff Kindler bring important experience, expertise and perspectives to Perrigo."

Starboard, which currently holds a 6.7-percent stake in Perrigo, previously urged the company to refocus its core consumer healthcare unit and offload certain assets, such as its prescription pharmaceuticals business. The investor had also criticised the drugmaker for failing to reach sales targets following its decision to rebuff a takeover offer from Mylan.

The news comes after Starboard reached a deal with Depomed in October last year under which the drugmaker added three independent directors to its board. The investor had previously pushed to replace six members of Depomed's board after accusing the company of "serious corporate governance deficiencies, questionable capital allocation decisions and egregious actions."