Dechra Pharmaceuticals shares rose 1.5% to 3,492p in early morning trading on Tuesday after the group announced its acquisition of veterinary pharmaceutical manufacturer Med-Pharmex for £221.5 million.
The acquisition was finalised on a debt-free and cash-free basis, funded from existing available debt resources.
Dechra Pharmaceuticals commented the transaction provided further product scale to its operations in the US, which currently stands as the largest animal health market.
The company also said Med-Pharmex added a fresh pipeline of products, alongside manufacturing facilities which will provide additional capacity for the firm.
Med-Pharmex currently employs approximately 130 staff and serves the CAP, FAP and equine sectors.
Dechra Pharmaceuticals confirmed 75% of the group’s products are tailored for the CAP and equine market, the majority of which fit into Dechra’s therapeutic segment.
Med-Pharmex specialises in topical, oral and injectable products. The majority of the company’s revenue is linked to white label products sold via distributors. Dechra said it intended to bring some of its products in-house and sell them through its own sales and marketing channels, providing a material synergy benefit.
Med-Pharmex generated audited revenues of $43 million for FY 2021, and an adjusted EBITDA of $15.3 million and audited gross assets of $77 million.
The firm is expected to be immediately accretive to underlying EPS. Dechra said its leverage was expected to be 1.8x net debt to EBITDA on 31 December 2022, following the acquisition’s completion.
“I am delighted that we have completed the acquisition of Med-Pharmex, a company that I have been in dialogue with for a number of years. The US market is highly consolidated, therefore this is a unique opportunity to add several new products to our portfolio, enter the US FAP market and improve the manufacturing footprint for our North American business,” said Dechra Pharmaceuticals CEO Ian Page.
