Dechra Pharmaceuticals to acquire vetinary pharmaceuticals firm

Dechra Pharmaceuticals has agreed to conditionally acquire the entire issued share capital of Eurovet Animal Health, a vetinary pharmaceuticals business.

The business will be purchased for €135m (around £112.5m) on a debt-free, cash-free basis.

The acquisition will be funded using the proceeds of a fully underwritten rights issue which will raise around £60m (£58.2m net of underwriting commissions). The firm will also make use of a new debt facility.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The rights issue will be made on the basis of the new ordinary shares for every existing 10 ordinary shares at a price of 300p per share, representing a discount of 29.6% to the theoretical ex-rights price of 426.15p.

Dechra's Group Chief Executive, Ian Page said: "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.

"By bringing Eurovet to the group we will strengthen our European presence; will increase our product portfolio; improve our manufacturing capabilities and strengthen our management team. Furthermore, the acquisition accelerates our strategic objectives."

For the year ended December 31st, Eurovet's sales were €76.8m (about £64.0m).

The share price 8.41% to 503.00p.

NR