Dechra Pharmaceuticals shares rose sharply after the group announced it had acquired California-based veterinary pharmaceutical manufacturer, Med-Pharmex, for £221.5million.
The deal will, according to Dechra, provide ‘further product scale’ to its operations in the US.
FTSE 100-listed Dechra’s share price was up 4.3 per cent or 148.00p to 3,588.00p in afternoon trading, having fallen over 30 per cent in the last year.
It’s a deal: Dechra said the acquisition will provide ‘further product scale’ to its operations in the US
Med-Pharmex was revealed to shareholders as the ‘potential acquisition’ highlighted in Dechra’s July fundraising announcement.
Dechra said it had followed Med-Pharmex for a number of years and the firm had been a long-term acquisition target.
The group said the majority of Med-Pharmex’s revenue stems from white label products which are sold through distributors.
The company intends to bring some of these products in-house and sell through its own sales and marketing channels, which will provide a material synergy benefit.
Longer term, synergies will also be realised from the integration and improved utilisation of the manufacturing facilities, Dechra said.
The acquisition will be funded from existing available debt resources.
In the year to December 2021, Med-Pharmex generated audited revenues of $43million and an adjusted EBITDA of $15.3million.
Ian Page, chief executive of Dechra, said: ‘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.’
