Dechra deal will boost European presence

PET DRUGS firm Dechra Pharmaceuticals said it will buy the Netherlands-based AST Farma and Le Vet for a total of £296m in a cash-and-share deal to boost its presence in Europe.

The debt-free, cash-free deal will see Dechra paying about 75 per cent in cash and 25 per cent in new Dechra shares, subject to a two-year lock-in.

AST Farma is an animal pharmaceuticals firm that specialises in generic products, while Le Vet focuses on the European markets outside of the Netherlands.

Dechra, which manufactures pharmaceuticals in Skipton, plans to raise about £100m through a placing of 5.1 million new ordinary shares at 2,050 pence each with institutional investors to fund the deal.

The company will also issue 3.67 million new ordinary shares to the sellers.

Dechra, which has been looking to acquire AST Farma and Le Vet for a number of years, said it intended to recommend its shareholders to vote in favour of the deal.

Dechra’s CEO Ian Page said: “The acquisition is a rare opportunity to strengthen our EU segment in all the major European countries in which we operate.”

Analysts at N+1 Singer said in a note: “Le Vet is well known as an innovative developer of enhanced generic medicines for the European market and has been growing very strongly in recent years as new products have launched via partners. The deal is guided to be materially earnings enhancing in 2019.”