PetIQ, Inc. Enters Into Definitive Agreement to Acquire Perrigo Animal Health
Combines PetIQ’s and Perrigo Animal Health’s Complementary Product Portfolio and Brands to Significantly Broaden Customer Reach, Increase Manufacturing Scale and Enhance Margin Profile
Strategic Transaction Expected to Generate
Cord Christensen, PetIQ’s Chairman and Chief Executive Officer commented, “We believe this strategic transaction will create significant long-term value for all of our stakeholders as we further the execution of our Follow the Pets long-term strategy by combining our companies’ complementary branded pet health and wellness product offerings to create a larger and more diversified business. Similar to
Strategic and Financial Benefits
The transaction will create a larger and more diversified animal health company.
Diversifies and Expands Pet Healthand Wellness Branded Product Offerings: The combination of PetIQ’s existing portfolio of products sold under brands including PetAction™, Advetca®, PetLock® with the complementary products sold under brands of Perrigo Animal Health, PetArmor®, Sentry®, and Sergeant’s™, creates a combined company with approximately $605 millionin pro forma 2018 net sales. The acquisition creates a company with meaningful product category, brand, and sales channel diversity with a focus on accessible and affordable, high-quality pet preventive and wellness veterinary products.
- Accelerates Whitespace Realization and Enhances Customer Relationships: The acquisition of
Perrigo Animal Healthallows PetIQto more rapidly realize the opportunity provided by the macro trends in the pet industry, where there is rising pet ownership, a heightened sensitivity to the rising healthcare costs associated with pet ownership, pet humanization, and increased aging of pets that depend on better healthcare. Complementary distribution channels and sales teams provide actionable whitespace opportunities in new and existing customers representing the potential to accelerate net sales growth for both PetIQ’s and Perrigo Animal Health’s current product portfolios.
- Increased Operating Scale Provides Significant Future Synergies and Enhances Margin Profile: In addition to benefiting from greater operating scale and increased procurement savings,
Perrigo Animal Healthadds outstanding manufacturing expertise and marketing capabilities that will provide future cost benefits to PetIQ. Together, the combined company expects to generate more than $3 millionin run-rate cost synergies by 2020 and growing to more than $5 millionby 2021 primarily from procurement, manufacturing and marketing efficiencies. Beyond these cost benefits, the combined company expects to realize additional benefits of scale via sharing of best practices, leveraging established infrastructure and strengthening retail partnerships.
Under the terms of the
1 Pro forma net leverage defined as PetIQ’s net debt as of
Conference Call and Webcast
The Company will host a conference call and webcast where members of the executive management team will discuss this transaction and its first quarter 2019 financial results today,
A replay of the conference call will be archived on the Company’s website and telephonic playback will be available through
With brands such as PetArmor®, Sentry®, and Sergeant’s®,
Forward Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties, such as statements about our plans, objectives, expectations, assumptions or future events. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "believe," "intend," "may," "will," "should," "could" and similar expressions. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from any future results, performances, or achievements expressed or implied by the forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to, our ability to successfully grow our business through acquisitions; our dependency on a limited number of customers; our ability to implement our growth strategy effectively; disruptions in our manufacturing and distribution chains; competition from veterinarians and others in our industry; reputational damage to our brands; economic trends and spending on pets; the effectiveness of our marketing and trade promotion programs; recalls or withdrawals of our products or product liability claims; our ability to manage our manufacturing and supply chain effectively; disruptions in our manufacturing and distribution chains; our ability to introduce new products and improve existing products; our failure to protect our intellectual property; costs associated with governmental regulation; our ability to keep and retain key employees; our ability to sustain profitability; and the risks set forth under the “Risk Factors” of our Annual Report on Form 10-K for the year ended
Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results. The forward-looking statements speak only as of the date on which they are made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Consequently, you should not place undue reliance on forward-looking statements.
|Investor Relations Contact:||Media Relations Contact:|
Source: PetIQ, Inc.