Health Care and Manufacturing

Perrigo acquires Velcera for $160M to expand in pet-health market

February 5, 2013
| By Pete Daly |
Print
Text Size:
A A
Perrigo acquires Velcera for $160M to expand in pet-health market
Photo via fb.com

Perrigo has signed a definitive agreement to acquire Velcera Inc. — an OTC pet health-products company in Yardley, Pa. — for $160 million in cash, with the acquisition expected to close this year.

Perrigo (Nasdaq: PRGO) said Velcera is a “leading companion pet health-product company,” providing consumers with “best in class pet health products that contain the same active ingredients as branded veterinary products, but at a significantly lower cost.”

Velcera products include the PetArmor flea and tick products and are available at major retailers nationwide.

Velcera is the Allegan pharmaceutical company’s second acquisition in the emerging OTC companion animal health care market, having recently acquired Sergeant’s Pet Care Products.

Perrigo said Velcera, with major retail partners, has been developing an OTC market for pet health products traditionally dispensed only by veterinarians.

Retail sales of the PetArmor franchise exceeded $100 million in 2012, the “value" brand’s first full year on the market. It was launched in April 2011. Velcera sales for the calendar year 2012 were approximately $60 million.

Perrigo said the PetArmor franchise brand may include more potential products in the flea and tick and health and wellness categories “to bring additional vet technologies to the hands of consumers in the mass market.”

PetArmor is “as safe and effective as Frontline," and "the “secret to PetArmor and Frontline’s superior protection is Fipronil, recommended 3 to 1 by vets,” according to the PetArmor website.

Perrigo Chairman/CEO Joseph C. Papa said the company is expanding its pet health care business.

“Velcera’s product mix represents a natural extension to the Sergeant’s portfolio we acquired last October,” Papa said. “The PetArmor franchise will accelerate our strategy to deliver compelling value to both our retail customers and American consumers.

"Additionally, we see an excellent opportunity to leverage our existing commercial, manufacturing and distribution capabilities, and our customer base, as we aim to make quality, affordable pet-care products available to consumers everywhere,” he said.

Perrigo said if the transaction allows a full 12 months of sales in fiscal 2014, Velcera is “expected to be 11 cents accretive to adjusted earnings per share and neutral to marginally dilutive to GAAP EPS after the inclusion of intangible amortization, transaction and integration-related expenses. The transaction is expected to be ROIC accretive in fiscal 2015.”

Perrigo is the world’s largest manufacturer of OTC pharmaceutical products for the store-brand market.

The company's primary markets include the U.S., Israel, Mexico, the U.K., India, China and Australia. 

Recent Articles by Pete Daly

Editor's Picks

Comments powered by Disqus