Dechra in Croatian move

DECHRA, the specialist animal veterinary pharmaceuticals and related products business, is buying a near two-thirds stake in an animal health products manufacturer in Croatia as part of a £36m deal.

The group, which has ist headquarters at Lostock Gralam near Northwich,  has reached an agreement with Marijan Hanžeković to acquire his 63.3% holding (equivalent to 69% voting rights) in Genera, a Croatian listed business.  
 
Dechra is offering €23.66 (£16.63) per share, which is equivalent to €51.4m for the entire share capital on a cash free debt free basis.

The €23.66 per share is a 42.5% premium to the closing price on July 31, 2015 and an 81.6% premium based on the average price for the last three months.  This will be wholly payable in cash and is to be funded from Dechra’s existing debt facilities.
 
Under the Croatian Takeover Rules, the conditional offer to acquire Mr. Hanžeković’s shares requires Dechra to make a mandatory offer for the remaining issued share capital of Genera.  The move is conditional on shareholder approval.
 
Genera is the oldest and largest manufacturer of animal health products in Croatia with a strong market share in its local market and neighbouring countries.
 
In its financial year ended December 31, 2014 Genera reported revenues of £20m (€28.4m).

Ian Page, Dechra’s CEO, said: “This is a very positive step for both Dechra and Genera.  We have known the company a long time and are keen to work with the experienced Genera team to build the business.  We believe this opportunity represents an attractive entry strategy to the poultry vaccine market with the potential to explore vaccines for other species in the longer term.

“In line with our strategy, this acquisition will accelerate our geographic expansion as well as broaden our FAP portfolio.  Although the transaction is expected to be earnings neutral in the first two years of ownership, it offers great opportunities for our longer term ambitions.”

Subject to clearance by the Croatian authorities, the offer is expected to be launched in September and complete by November 2015.
 
Advisers to Dechra included a transactions services team from Deloitte in Manchester and law firm DLA Piper.

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