Perrigo selling business unit for $185M
A drug maker in the area is divesting one of its businesses as part of a strategic transformation.
Dublin-based Perrigo — which has its North American headquarters in Allegan —reached a definitive agreement to sell its animal health business to Omaha, Nebraska-based PetIQ (Nasdaq: PETQ) in a transaction valued at $185 million in cash, according to Perrigo yesterday.
In calendar year 2018, Perrigo realized $94 million in net sales and $0.08 of adjusted diluted earnings per share from the animal health business.
The sale is subject to customary closing conditions and regulatory approvals.
The divestiture is part of Perrigo’s plan to “transform itself into a consumer-focused self-care company.”
“We are pleased to have reached an agreement with PetIQ on selling our animal health business and look forward to working with them to ensure a seamless transition,” said Murray Kessler, president and CEO, Perrigo.
“This divestiture helps us focus our portfolio on the consumer self-care market. In PetIQ’s hands, we have no doubt the animal health business will be in a strong position to execute on its strategy.”
Cord Christensen, chair and CEO of PetIQ, said he believes the deal will create “significant long-term value” for his company and its stakeholders.
“Similar to PetIQ, Perrigo Animal Health has a track record of building sales and category growth in areas complementary to PetIQ through offering high-quality and affordable veterinarian products to pet parents,” Christensen said.
“This business combination is aligned with our mission to make pets’ lives better through improved access to affordable pet health care.”
Chicago-based William Blair is serving as financial advisor to Perrigo on the transaction. Philadelphia-based Morgan, Lewis and Bockius is serving as Perrigo’s legal counsel.
New York-based Jefferies is serving as financial advisor to PetIQ. New York-based KPMG US is PetIQ’s accounting and audit advisor. Chicago-based Winston & Strawn and Houston-based Baker Botts are acting as legal counsel for PetIQ.
Founded in Allegan in 1887, Perrigo (NYSE, TASE: PRGO) is a manufacturer of private label over-the-counter and generic prescription pharmaceuticals, as well as health and wellness products.
The company reported net sales of $4.7 billion in 2018.
Founded in 2010, PetIQ is a provider of pet health and wellness solutions.
Its brands include pet prescription medication, over-the-counter treatments, pet supplies and pet treats.
The company distributes its products across a network of national retail stores in mass, club, grocery, pharmacy and e-commerce channels.
PetIQ reported $528.6 million in 2018 revenue.