logo
Share SHARE
FONT-SIZE Plus   Neg

Dechra To Buy Dutch Veterinary Firm Eurovet, Plans Rights Issue; Shares Up

Shares of Dechra Pharmaceuticals Plc (DPH.L) grew around 9 percent in the morning trade on London Stock Exchange after the British veterinary pharmaceuticals firm announced its agreement to buy Dutch veterinary company firm Eurovet Animal Health B.V. aiming to strengthen its European presence. The company also announced a fully underwritten 3 for 10 rights issue to fund the deal.

The company plans to buy Eurovet, the pharmaceutical business of A.U.V. Holding B.V., for a total cash consideration of 135 million euros or about 112.5 million pounds on a debt-free, cash-free basis.

Dechra expects that the acquisition would help it to accelerate its strategic objectives. The deal is expected to be earnings enhancing in the first full year of ownership and materially earnings enhancing thereafter after synergies but excluding one-off costs of integration.

According to the company, the combination has compelling strategic and synergistic benefits including revenue synergies and margin uplift through marketing of Dechra's products via Eurovet's direct sales force in Germany, among other things.

Eurovet, a Continental European veterinary pharmaceuticals business, operates in both the companion animal pharmaceuticals and farm animal pharmaceuticals markets. For the year ended December 31, 2011, Eurovet's sales were 76.8 million euros and EBITDA was 12.8 million euros.

The Netherlands-based Eurovet has highly complementary products, geographies, manufacturing competencies and is similar in structure to Dechra Veterinary Products, the company noted.

Commenting on the acquisition, Dechra's Group Chief Executive, Ian Page said, "This is a great opportunity to build on the strong foundation we have created for our pharmaceuticals business, Dechra Veterinary Products. By bringing Eurovet to the Group we will strengthen our European presence; will increase our product portfolio; improve our manufacturing capabilities and strengthen our management team. Furthermore, the acquisition accelerates our strategic objectives."

Dechra will fund the acquisition with the proceeds of the rights issue to raise approximately 60 million pounds as well as debt pursuant to the terms of a new debt facility. The issue will be made on the basis of 3 new ordinary shares for every existing 10 ordinary shares at a price of 300 pence, representing a discount of 29.6 percent.

Dechra shares are currently trading at 503.79 pence, up 39.79 pence or 8.57 percent.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Major League Baseball is talking expansion for the first time in a few decades. Owners stand to make a pretty penny from expansion fees and subsequent television rights. The possibility of a more balanced schedule is also enticing. Strong expansion candidates in the U.S. and Canada are ready... The New York Times is teaming up with Google again to give away Google Cardboard, the virtual reality headsets, but this time only to its "most loyal" digital subscribers. The company said that the digital-only subscribers selected for this distribution were chosen based on the duration of their subscriptions. Oil company Exxon Mobil Corp. on Friday reported a 63 percent fall in profit for the first quarter from last year, while Chevron Corp. reported a loss for the quarter, both on lower revenues. The results were impacted by the fall in crude oil prices and weaker refining margins. However, Exxon Mobil's earnings beat analysts' estimates, while Chevron's loss was wider than their expectations.
comments powered by Disqus
Follow RTT