Dechra expands with £113m acquisition of Dutch group
STAFFORDSHIRE-based veterinary products supplier Dechra Pharmaceuticals has expanded with the £112.5m acquisition of a Dutch firm.
Eurovet Animal Health, a continental-wide veterinary pharmaceuticals business, operates in both the companion animal pharmaceuticals and farm animal pharmaceuticals markets. It is the pharmaceutical business of AUV Holding.
The deal was heavily advised out of Birmingahm and showcased the city’s professional services sector.
Charles Cook, of law firm DLA Piper’s Midlands office in Birmingham, was lead partner on the deal.
He said: “Dechra is one of the great success stories of Midlands companies – having taken advantage of the opportunities presented by the global pharmaceutical market. We are delighted to have assisted them in this key strategic acquisition.”
Investec Investment Banking was financial adviser and broker with KPMG reporting accountants.
The Birmingham-based banking syndicate comprised: Lloyds, Barclays, HSBC and Handelsbanken.
PR came from Fiona Tooley of Tooley Street Communications.
For the year ended December 31, 2011, Eurovet’s sales were £64m (€76.8m) and EBITDA was £10.7m (€12.8m).
Dechra said the deal was highly complementary as Eurovet has products, geographies, manufacturing competencies and is similar in structure to Dechra Veterinary Products. It has sales and marketing operations in the Netherlands, Germany, Belgium, Denmark and the UK, and supplies to over 40 countries in the EU and worldwide.
Dechra said the deal would enable it to accelerate its strategic objectives and is expected to be earnings enhancing in the first full year of ownership and materially earnings enhancing thereafter once full integration is complete.
Due to its size, the acquisition requires the approval of shareholders, which will be sought at a general meeting next month.
Ian Page, Dechra’s Group Chief Executive, said: “This is a great opportunity to build on the strong foundation we have created for our pharmaceuticals business, Dechra Veterinary Products. The combined management teams are very excited by the prospects the enlarged group will create.
“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.”
The acquisition will be funded with the proceeds of a fully underwritten rights issue set to raise approximately £60m together with the terms of a new debt facility. The rights issue will be made on the basis of three new ordinary shares for every existing 10 ordinary shares at a price of 300p per new share.
