Dechra to dispose of services arm and focus on pharma business

DECHRA is to sell off its services arm for £87.5m so it can concentrate on being a specialist veterinary pharmaceuticals business.

The Staffordshire-based firm says it is planning to create a business focused on high margin, specialist, veterinary pharmaceutical products, operating in a global market with attractive long term growth prospects.

It is proposing to dispose of of National Veterinary Services, Dechra Laboratory Services and Dechra Specialist Laboratories to Patterson Companies, Inc. for a total effective consideration of £87.5m.

Patterson is a US-based speciality distributor serving the dental, veterinary and rehabilitation supply markets internationally. It has a market cap of US$4bn.

The Dechra board says it believes that the disposal is in the best interests of shareholders as it allows the firm to focus on its key strategic own branded veterinary products businesses.

And the deal will provide Dechra with additional resources to continue the development of the pharmaceuticals segment, both organically and, potentially, by way of acquisition.

The disposal is conditional, inter alia, upon the approval of Dechra shareholders.

Given that approval, completion of the disposal is currently expected to take place in mid-August.

Ian Page, Dechra’s chief executive officer, said:  “The sale of our services segment represents a key strategic development for Dechra.

“It will create a focused, international, branded veterinary products business, with the resources to pursue further organic and acquisitive growth and thereby generate increased value for shareholders.”

The legal team to Dechra was led by Charles Cook at DLA Piper in Birmingham while Patterson was advised by law firm Eversheds.