Zoetis Inc. agreed to acquire Pharmaq for $765 million from a fund managed by private equity firm Permira, a deal that would expand the animal health products maker’s portfolio into the market for fish and aquaculture.
The acquisition will be neutral to adjusted 2016 earnings and start adding to profit thereafter, the $22 billion maker of drugs for pets and livestock said in a statement. While it won’t take out new debt for the acquisition, Zoetis will use a credit facility to help finance the purchase.
Buying closely held Pharmaq will provide Zoetis with products like the fish vaccine AlphaJect and the drug AlphaMax, which helps protect farmed salmon from sea lice. Oslo, Norway-based Pharmaq had about $80 million in revenue last year, focusing on the market for farmed fish. The aquatic health industry generates about $400 million a year in sales and has been growing faster than the overall livestock segment, Zoetis said.
"Fish is the most consumed animal product in the world, and 50 percent of this consumption comes from farmed fish," Juan Ramon Alaix, Zoetis’s chief executive officer, said by phone. The deal gives him access to that market, he said. "We have now, with farmed fish, all the species that are relevant."
Alaix said that most of the savings that would be generated from the deal would be in administrative functions, rather than slimming down research and development or the sales force. And he said the company is open to more deals, including larger ones.
"We don’t think that size that will eliminate potential opportunities," Alaix said.
The company plans to close the Pharmaq transaction around Nov. 10. Zoetis will discuss the transaction during its third-quarter earnings call Tuesday.