Chesire-based international veterinary drugs giant Dechra Pharmaceuticals announced it has agreed to acquire US-based Piedmont Animal Health, Inc for £175 million in cash.
Dechra also announced it has raised £184 million via a discounted placing sale and a retail offer of new ordinary shares in the company.
“The capital raise will also provide balance sheet flexibility to execute on an active acquisition pipeline including on one near term opportunity which the company is in exclusive discussions to acquire with an acquisition price similar to Piedmont,” said Dechra.
“Assuming completion of the potential acquisition and after paying the purchase cost of Piedmont, Dechra expects its net debt to EBITDA to be approximately 1.8x as at 31 December 2022.
“Both Piedmont and the potential acquisition represent compelling opportunities to deliver shareholder value and are closely aligned to Dechra’s stated strategic ambitions.”
Dechra said Piedmont has eight novel products in various stages of development serving both the cat and dog markets and that the products are all within Dechra’s key therapeutic areas of competence.
“A total of 5,247,813 placing shares have been placed by Investec Bank plc, the sole bookrunner, at a price of 3430 pence per placing share, raising gross proceeds of £180 million for the company,” said Dechra.
“The placing price of 3430pence per share represents a discount of approximately 8 per cent. to the closing middle market share price of 3730 pence per share on 20 July 2022.
“A total of 116,870 new ordinary shares have been subscribed for in the retail offer at the placing price, raising gross proceeds of approximately £4 million for the company.
“In aggregate, the placing shares and the retail offer shares represent approximately 4.95 per cent. of the existing issued share capital of the company.”
On current trading and and the firm’s refinancing, Dechra added: “On 11 July 2022, Dechra released a trading update for the financial year ended 30 June 2022 in which the company stated it was pleased to report that the group’s strong trading performance had continued through the year and remains in line with expectations.
“There has been no change to outlook since this time.
“On 14 July 2022, the company announced a refinancing of the group’s debt facilities through a debt private placement, issuing €50 million seven year and €100 million ten year new senior unsecured notes.
“The private placement was undertaken to achieve the group’s aim of ensuring diversified sources of funding and to extend the group’s debt maturity profile.
“All proceeds from the placement have been used to repay existing debt on the group’s revolving credit facility.”