Perrigo Company (Nasdaq:PRGO; TASE:PRGO) is expanding into veterinary medicine, with the acquisition of the assets of Sergeant's Pet Care Products Inc. for $285 million in cash. Perrigo says that it expects to report a tax benefit of $50 million on the deal, which it expects to by the end of September.
Perrigo says that the US pet healthcare market totals $8 billion a year and has shown consistent growth through economic cycles. Consumers are treating their pets like members of the family and are spending a higher proportion of discretionary income on pet care and well-being. It adds that the acquisition fits in with its strategy to expand its consumer healthcare business.
Perrigo chairman and CEO Joseph Papa said, "This acquisition allows us to penetrate the pet care category by offering numerous flea and tick, health and well-being and consumable products to pet owners at affordable prices. Sergeant's has a proven record of innovation, high quality manufacturing with great customer service." He added, "This is a first step in executing on our strategy to expand our consumer healthcare portfolio into pet care, an adjacency of interest to our retail customers."
Papa concluded, "We are very impressed with Sergeant's strategic direction, growth and product offerings since its founding in 1868. The team has built a company focused on bringing high quality, affordable pet care products quickly to market and the barriers to entry in this category are high. This strategic acquisition will expand our existing Consumer Healthcare business and add tremendous value for our shareholders for years to come."
Perrigo said the deal will add $0.20 a share to its adjusted earnings in the first fiscal year after closing. Perrigo also expects to book a $50 million tax benefit from the acquisition and plans to close the deal during the second quarter of its 2013 fiscal year.
Published by Globes [online], Israel business news - www.globes-online.com - on September 13, 2012
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