Elanco Signs Agreement with PetIQ to Divest Capstar®
GREENFIELD, Ind.--(BUSINESS WIRE)--Jan 13, 2020--
Elanco Animal Health Incorporated (NYSE: ELAN) announced today it signed an agreement to divest the U.S. rights to Capstar®, an oral tablet that kills fleas in dogs and cats, to PetIQ, Inc. (Nasdaq: PETQ), a leading pet medication and wellness company, for $95 million in an all-cash deal. The product had 2018 revenue of $28.5 million.
Divesting Capstar further advances Elanco’s efforts to gain U.S. regulatory clearance for the previously announced acquisition of Bayer AG’s (ETR: BAYN) global animal health business. The closing of the transaction with PetIQ is contingent on Elanco entering into a consent decree with the Federal Trade Commission (FTC) in connection with its Bayer transaction, as well as other customary closing conditions.
“We’re pleased with the continued progress on a number of fronts to move the acquisition of Bayer’s animal health business toward completion,” said Jeff Simmons, president and CEO of Elanco. “PetIQ’s vast distribution network and retail presence make it a natural choice to take Capstar into the future. As a current distributor for Capstar, PetIQ is well prepared to take over this product and ensure pet owners have continued access to this fast-acting flea control product.”
This is the second divestiture announcement Elanco has made in the last week as it works to bring its acquisition of Bayer’s animal health business to a close. Elanco previously announced an agreement to divest Osurnia®, a treatment for otitis externa in dogs, to Dechra Pharmaceuticals, PLC. The company has stated it anticipates divesting a small portfolio of products across both organizations with total 2018 revenue of approximately $120 million to $140 million to achieve any required clearances globally. Osurnia and Capstar account for approximately half of that revenue. Elanco is in advanced discussions with both the FTC and EU Commission in regards to the remaining assets in those jurisdictions.
Discussions with other regulatory authorities are progressing as expected. Elanco already received antitrust clearance for the transaction from the Chinese competition authority. Any proposed remedy and final clearance for the Elanco/Bayer transaction remain subject to review and approval from the other regulatory authorities.
Goldman Sachs acted as financial advisor to Elanco. Covington & Burling LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal counsel to Elanco.
Elanco (NYSE: ELAN) is a global animal health company that develops products and knowledge services to prevent and treat disease in food animals and pets in more than 90 countries. With a 65-year heritage, we rigorously innovate to improve the health of animals and benefit our customers, while fostering an inclusive, cause-driven culture for approximately 5,800 employees. At Elanco, we’re driven by our vision of food and companionship enriching life - all to advance the health of animals, people and the planet. Learn more at www.elanco.com.
Forward Looking Statement
This press release contains forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995) about our expectations concerning our antitrust filings with the FTC and other regulators in connection with our acquisition of the animal health business of Bayer AG, and reflects Elanco’s current belief. Forward-looking statements are based on our current expectations and assumptions regarding our business and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. For further discussion of these and other risks and uncertainties, see Elanco’s most recent filings with the United States Securities and Exchange Commission. Except as required by law, Elanco undertakes no duty to update forward-looking statements to reflect events after the date of this release.
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CONTACT: Investor: Jim Greffet (317) 383-9935 orGreffet_james_f@elanco.com
Media: Colleen Parr Dekker (317) 276-4076 email@example.com
KEYWORD: UNITED STATES NORTH AMERICA INDIANA
INDUSTRY KEYWORD: HEALTH CONSUMER AGRICULTURE PETS NATURAL RESOURCES VETERINARY
SOURCE: Elanco Animal Health Incorporated
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PUB: 01/13/2020 08:00 AM/DISC: 01/13/2020 08:01 AM