Dechra Pharmaceuticals PLC (LSE: symbol DPH) announces the conditional acquisition of the entire share capital of Putney, Inc, a leading developer of generic companion animal pharmaceuticals in the US, based in Portland, Maine.
"In line with our strategy, the acquisition of Putney will significantly strengthen Dechra’s position in the US, provide high quality FDA approved veterinary products and broaden our pipeline. We are delighted to secure this unique opportunity which adds scale and additional expertise to our North American business." Ian Page, Chief Executive Officer.
The most complementary US acquisition opportunity identified
Accelerates Dechra’s North American strategy, potentially doubling our US business within our planning horizon
Adds critical mass to Dechra in the world’s largest companion animal market
Provides access to a high quality product range and complementary therapeutic focus areas
Strengthens the Group’s pipeline for the US
Builds on Putney’s regulatory expertise and commercial team
Delivers synergies while retaining the resources needed in Portland
Acquisition and Placing expected to be earnings enhancing in financial year 2017 and materially earnings enhancing in financial year 2018 and thereafter (on an underlying results basis)
Acquisition meets Dechra’s financial returns criteria
Acquisition conditional upon US regulatory approval
The total consideration payable for Putney amounts to $200 million (£139 million) in cash at completion on a debt-free/cash-free basis.
Putney is a leading independent developer of companion animal generic pharmaceuticals in the US, based in Portland, Maine, and employs approximately 60 people. Putney was founded in 2006 and launched its first veterinary product, a Carprofen caplet, in 2009. Putney currently markets 11 products, which have achieved significant market shares and continue to grow, in complementary therapeutic areas to Dechra, including pain management, anti-infectives and dermatology. In addition, Putney has a strong pipeline of 10 complementary products, which are expected to launch over the coming years. Putney’s products have been marketed through multiple channels, including the national distributors, regional distributors, and direct to veterinary practices.
Putney has focused on targeting veterinary products with limited competition and high market demand. The company has an experienced regulatory team, with a successful track record of product approvals with the Center for Veterinary Medicine, part of the FDA in the US. Putney has achieved over 40 per cent of all US companion animal generic approvals since 2012. Putney outsources manufacturing either through profit share arrangements or on a fee-for-service basis.
For Dechra, Putney has been recognised for some time as the most complementary acquisition opportunity identified in the US. The acquisition provides access to Putney’s existing product portfolio and development pipeline, both of which are high quality and in complementary therapeutic focus areas, while adding critical mass to Dechra’s existing US operations and infrastructure. Dechra will be able to leverage its own sales and marketing teams and Putney’s distribution channels, as well as share best practice in the areas of product development and regulation. In addition, Dechra believes there are opportunities for synergies while maintaining the necessary resources in Portland. In the future it may also be possible to manufacture in-house products in the pipeline, which are not already set up with third parties.
The Acquisition is conditional upon Dechra receiving clearance under the US Hart-Scott-Rodino Antitrust Improvements Act, which is expected to be received no later than mid April 2016.
In addition, Dechra announces that it has placed 4,398,600 new Ordinary Shares at 1100 pence per share to raise approximately £47.1 million, net of expenses, to part fund the Acquisition.