Dechra wins over US vet group with £220m bid after years of courting
Veterinary pharmaceutical firm Dechra has splashed more than £220m on an American medicine manufacturer, a long-term acquisition target for the company.
Californian Med-Pharmex, which has a workforce of some 130, is expected to bolster Dechra’s manufacturing facilities in North America and provide “attractive financial returns”.
The deal will be funded from existing debt resources, London-listed Dechra said in a statement today, having hinted at an upcoming deal in late July.
Dechra wrapped up a £180m share placing just last month, which intended to diversify Dechra’s sources of capital and repay debt on its revolving credit facility.
Investors were keen on the move, sending shares up 3.7 per cent to 3,568p per share by mid-afternoon.
The deal has helped the company retrace some of its losses over the past year, having lost more than a third of its share price in 12-months.
Med-Pharmex, generated £36m in revenue last year, mostly from white label products sold through distributors, some of which Dechra plans to bring in-house and sell through its own sales and marketing channels.
“I am delighted that we have completed the acquisition of Med-Pharmex, a company that I have been in dialogue with for a number of years,” CEO Ian Page said today. “The US market is highly consolidated, therefore this is a unique opportunity to add several new products to our portfolio.”
Page said in Dechra’s latest trading update in mid-July that the group had been ‘outperforming’ the market in North America, where revenue grew around a quarter in the year to 30 June, in comparison with some eight per cent of growth in Europe.
The veterinary pharmaceutical group also completed another acquisition of US healthcare firm Piedmont for £175m in July, which brings two products under Dechra’s wing which are expected to launch in between 2024 and 2025, with an expected peak sales potential of at least £34m.
The US is currently the world’s largest animal health market.