The acquisition of Bayer’s animal health unit is subjected to regulatory approval. As a part of the deal, Bayer will receive $5.32 billion in cash, subject to customary purchase price adjustments, and $2.28 billion made up of Elanco Animal Health common shares. The Bayer deal would push Elanco’s gross debt to roughly five times adjust EBITDA after taking into account cost cuts it plans to make through the acquisition of Bayer’s animal health unit.
The deal is expected to close by mid-2020, Elanco said.
COMPANY STATEMENTS ON THE ELANCO - BAYER MERGER
Elanco said in a statement the combined organization will “continue to deliver mid-single-digit revenue growth while accelerating the achievement of adjusted gross margin goals and delivering doubledigit adjusted EBITDA margin growth.”
Jeffrey N. Simmons, Elanco president and chief executive, said: “The move combines our long-standing focus on the veterinarian while meeting pet owners’ changing expectation of pet care and access to products.”
“The combination with Elanco will give rise to a leading competitor in the animal health industry, benefiting customers, employees and shareholders alike,” said Bayer chief executive Werner Baumann.
The division sells veterinary treatments for both pets and livestock, including the bestselling Advantage treatment for fleas and ticks.
SURPASS ZOETIS AS INDUSTRY LEADER
Now that the Bayer deal has materialized, more than 40 percent of the combined company’s sales would come from animal health products, a similar proportion to market leader Zoetis.
This story is from the September 2019 edition of Industry Leaders.
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This story is from the September 2019 edition of Industry Leaders.
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