Zoetis Inc. (NYSE:ZTS) and Phibro Animal Health Corporation
(Nasdaq: PAHC) today announced that they have entered into a
definitive agreement where Phibro Animal Health will acquire
Zoetis’ medicated feed additive (MFA) product portfolio, certain
water soluble products and related assets for $350 million, subject
to customary closing adjustments. This transaction is expected to
be complete in the second half of calendar year 2024.
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Both Zoetis and Phibro Animal Health have a longstanding
commitment to the production animal health sector. The acquired
product portfolio, which generated approximately $400 million in
revenue in 2023, is comprised of more than 37 product lines that
are sold in approximately 80 countries. Also included in the
agreement are six manufacturing sites, four in the U.S., one in
Italy and one in China. More than 300 Zoetis colleagues who support
manufacturing, distribution and commercial activities are expected
to transition to Phibro Animal Health.
This transaction demonstrates Zoetis’ disciplined capital
allocation strategy to focus its investments on solutions for
animal health, productivity and sustainability. With this
divestiture, Zoetis can focus its livestock investments in other
solutions, including vaccine, biologic and genetic programs.
“We remain committed to providing innovative solutions to our
livestock customers,” said Kristin Peck, Chief Executive Officer of
Zoetis. “We believe that the long-term value of the transferred
portfolio will be fully realized with Phibro Animal Health which
will continue to expand its reach given their strong relationships
with customers worldwide.”
Zoetis’ strong portfolio of MFA and water soluble products
across cattle, swine and poultry will complement and expand Phibro
Animal Health’s species and product portfolios, helping customers
meet the highest standards of animal care, prevent disease, and
enhance nutrition. On a combined basis for the acquisition, Phibro
Animal Health sales in the last twelve months would have been
approximately $1.4B. The portfolio is expected to boost Phibro
Animal Health’s profitability and EBITDA margin and be accretive to
its Adjusted Earnings Per Share. The acquisition is expected to be
funded primarily with debt, and Phibro Animal Health has received
financing commitments from a number of key relationship banks.
Phibro Animal Health expects to have net leverage of 3.5-4.0x Debt
/ Adjusted EBITDA at close and will target net leverage of below
3.0x by its fiscal year end June 30, 2027.
“Over a long period of time, Zoetis has built a valuable,
high-quality and reliable source of medicated feed additives around
the globe,” said Jack C. Bendheim, Chairman, President and Chief
Executive Officer of Phibro Animal Health. “This investment will
enhance, diversify and broaden our portfolio globally and help us
continue to deliver value to our customers and to our shareholders.
We believe our cash generation will allow for continued investment
into our higher growth businesses of Nutritional Specialties,
Companion Animal, and Vaccines. I am confident we have the right
capabilities to integrate and strengthen this business. I look
forward to collaborating with the Zoetis team and welcoming new
colleagues to Phibro Animal Health to support this portfolio.”
Zoetis and Phibro Animal Health will work closely with their
colleagues and customers to ensure a smooth transition and
continued supply of these important products.
Guggenheim Securities, LLC is acting as exclusive financial
advisor to Zoetis and Wachtell, Lipton, Rosen & Katz is acting
as legal advisor. Citi is acting as exclusive financial advisor to
Phibro and Kirkland & Ellis LLP is acting as legal advisor.
Phibro Animal Health will be hosting an investor call on April
29 at 8:30 am. Interested parties are invited to listen to the
conference call and view the presentation slides by visiting
https://investors.pahc.com. The discussion will also be available
by dialing +1 (888) 596-4144 in the U.S. and Canada, or +1 (646)
968-2525 for international callers. Provide the conference ID
6159146.
A real time audio webcast can be accessed via Phibro’s investor
relations website at https://investors.pahc.com. Conference call
slides will be posted to the website in advance of the call.
About Zoetis
As the world’s leading animal health company, Zoetis is driven
by a singular purpose: to nurture our world and humankind by
advancing care for animals. After innovating ways to predict,
prevent, detect, and treat animal illness for more than 70 years,
Zoetis continues to stand by those raising and caring for animals
worldwide – from veterinarians and pet owners to livestock farmers
and ranchers. The company’s leading portfolio and pipeline of
medicines, vaccines, diagnostics and technologies make a difference
in over 100 countries. A Fortune 500 company, Zoetis generated
revenue of $8.5 billion in 2023 with approximately 14,100
employees. For more information, visit www.zoetis.com.
About Phibro Animal Health
Phibro Animal Health Corporation is a leading global diversified
animal health and nutrition company. We strive to be a trusted
partner with livestock producers, farmers, veterinarians and
consumers who raise or care for farm and companion animals by
providing solutions to help them maintain and enhance the health of
their animals. For further information, please visit
www.pahc.com.
Forward-Looking Statements
This press release contains forward-looking statements, which
reflect the current views of Zoetis and Phibro with respect to
business plans or prospects, future operating or financial
performance, the proposed sale of Zoetis’ medicated feed additive
(MFA) product portfolio, certain water soluble products and related
assets, and other future events. These statements are not
guarantees of future performance or actions. Forward-looking
statements are subject to risks and uncertainties, including
uncertainties as to the timing of the consummation of the proposed
transaction or whether it will be completed; risks associated with
the impact or terms of the potential transaction; risks associated
with the benefits and costs of the proposed transaction, including
the risk that the expected benefits of the proposed transaction
will not be realized within the expected time frame, in full or at
all, and the risk that conditions to the potential transaction will
not be satisfied and/or that the potential transaction will not be
completed within the expected time frame, on the expected terms or
at all; the risk that any consents or regulatory or other approvals
required in connection with the proposed transaction will not be
received or obtained within the expected time frame, on the
expected terms or at all; the risk that the financing intended to
fund the proposed transaction may not be obtained; the risk that
costs incurred in connection with the proposed transaction will
exceed Zoetis’ or Phibro’s estimates or otherwise adversely affect
their business or operations; and the impact of the proposed
transaction on their respective businesses and the risk that
consummating the proposed transaction may be more difficult,
time-consuming or costly than expected, including the impact on
their respective resources, systems, procedures and controls,
diversion of management’s attention and the impact on relationships
with customers, governmental authorities, suppliers, employees and
other business counterparties. There can be no assurance that the
proposed transaction will in fact be completed in the manner
described or at all. If one or more of these risks or uncertainties
materialize, or if Zoetis or Phibro management's underlying
assumptions prove to be incorrect, actual results may differ
materially from those contemplated by a forward-looking statement.
Forward-looking statements speak only as of the date on which they
are made. Zoetis and Phibro expressly disclaim any obligation to
update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise. A further list and
description of risks, uncertainties and other matters can be found
in each of Zoetis’ and Phibro’s respective most recent Annual
Report on Form 10-K, including in the sections thereof captioned
“Item 1A. Risk Factors,” Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K. These filings and subsequent filings are
available online at www.sec.gov, www.zoetis.com or www.pahc.com, as
applicable, or on request from Zoetis or Phibro, as applicable.
ZTS-COR ZTS-IR ZTS-FIN
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version on businesswire.com: https://www.businesswire.com/news/home/20240428775498/en/
Media Contacts for Zoetis: Jenielle
Alonso 1-973-945-4333 (o) jenielle.alonso@zoetis.com
Laura Panza 1-973-975-5176 (o) laura.panza@zoetis.com
Investor Contacts for Zoetis: Steve
Frank 1-973-822-7141 (o) steve.frank@zoetis.com
Nick Soonthornchai 1-973-443-2792 (o)
nick.soonthornchai@zoetis.com
Contact for Phibro Animal Health Corporation Glenn David Chief
Financial Officer +1-201-329-7300 Or
Investor.relations@pahc.com
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