PET drugs firm Dechra Pharmaceutical is to make its largest acquisition to date with the £112.4m purchase of Dutch-owned Eurovet Animal Health.
The group, which makes drugs for animals and humans, said the move would strengthen its presence in Europe, increase its product portfolio and improve its manufacturing capabilities.
Eurovet, owned by AUV Holding, is a pharmaceuticals business which operates in both the pet pharmaceuticals and farm animal pharmaceuticals markets.
It is headquartered in Bladel in the Netherlands but it also has sales and marketing operations in Cambridge, Germany, Belgium and Denmark.
In 2011, it reported sales of £64m and an operating profit of £8.5m.
Dechra, which owns Skipton-based Dales Pharmaceuticals, said Eurovet’s products, geographies, manufacturing competencies complemented those at Dechra and the firm was similar in structure to its Dechra Veterinary Products business.
Ian Page, Dechra Pharmaceutical’s chief executive, said: “We have known the business for about five years. The countries they operate in are different, our products don’t overlap, their manufacturing skills are different to our skills, so their business complements our business.”
The move will enable Dechra to enter the German market for the first time and increase its presence in Belgium.
The acquisition will directly impact the Dales Pharmaceuticals business by bringing in products to be manufactured on site.
In particular, the business will manufacture Eurovet’s tablet products, something which Eurovet previously outsourced.
The Dales management team will also have close involvement with the manufacturing plant in Bladel.
Mr Page said: “Eurovet has some products that are outsourced and they don’t have manufacturing facilities for tablets. We do have those facilities and will be able to make those in Skipton.”
Eurovet, which employs 200 staff, will work under the Dechra Veterinary Products name.
Mr Page said Dechra would retain the majority of Eurovet’s staff.
“Most of the roles are complementary to what we do but there might be one or two that are duplicated,” he said.
He added: “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.”
Tony Griffin, chief executive of AUV, said: “We are delighted to select Dechra as the preferred bidder, we believe we have the right strategic partner with the shared vision to take Eurovet to its next stage of development.”
Due to its size, the acquisition requires the approval of shareholders, which will be sought at a general meeting next month.
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.