2nd Jun 2023 07:59
(Alliance News) - Dechra Pharmaceuticals PLC on Friday said it agreed to a takeover by EQT Fund Management SARL and Luxinva SA valuing it at GBP4.46 billion.
The veterinary pharmaceutical company said it reached an agreement with Freya Bidco Ltd, a newly formed company indirectly owned by EQT X EUR SCSp and EQT X USD SCSp, which act through its manager EQT Fund Management and Luxinva. EQT is a Swedish global investment organisation, while Luxinva is owned by the Abu Dhabi Investment Authority, a sovereign wealth fund of the United Arab Emirates.
The offer values Dechra shares at 3,875 pence each, which is a 13% premium to the company's closing price of 3,439.65p each on Thursday. It is 44% higher than Dechra's share price of 2,690p of April 12, a day before the start of its offer period.
However, the offer is 4.8% lower than the 4,070p potential offer floated in mid-April. Dechra said it considered the new offer "fair and reasonable."
The acquisition values Dechra at GBP4.46 billion on a fully diluted basis, implying an enterprise value of GBP4.88 billion. It is around 26 times Dechra's 2022's earnings before interest, tax, depreciation and amortisation of GBP188 million.
The takeover needs approval from 75% of Dechra shareholders and requires sanctioning by a court. The notices of the court meeting and the general meeting will be posted soon, Dechra said.
The company expects the takeover to complete towards the end of 2023, or early next year.
Dechra said: "EQT believes it is well positioned to support Dechra's next phase of growth by virtue of its insights and understanding developed from existing and former investments across the animal health value chain. EQT has a strong track record of deploying capital and expertise into growth-orientated businesses and supporting their management teams in achieving their strategic ambitions."
Last Monday, Dechra warned it was likely to miss annual profit guidance, after a more "volatile and challenging" trading environment in 2023.
It had said underlying operating profit for the financial year ending June 30 was likely to fall short of its GBP186 million guidance, blaming destocking by US wholesalers.
By Tom Budszus, Alliance News reporter
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