Perrigo Company, the American-Israeli maker of generic and over-the-counter drugs, said Thursday it would buy the privately-held animal healthcare company Sergeant's Pet Care Products for $285 million in cash, with the aim to tap into a resilient, growing market for ailing cats and dogs.
Omaha, Nebraska-based Sergeant's, established in 1868, will likely post $140 million in sales in the fiscal year ending September 30, with 200 employees. Its line of 1,000 non-prescription healthcare products for pets sell under the Atlantis, Fur-So-Fresh and Geisler Gourmet brands.
Perrigo shares closed down 0.25% in Tel Aviv Stock Exchange trading Thursday at NIS 435, but with more than NIS 106 million in shares changing hands, it was the day's most heavily traded stock. In New York, its shares were up 0.5% to $110.43 at 1 P.M. local time.
Pet care is an $8 billion industry that has shown consistent growth through economic cycles, Perrigo said, noting that consumers are spending a higher proportion of discretionary income on caring for their animals.
The acquisition, which is expected to be completed in the year's fourth quarter, will help boost Perrigo's range of over-the-counter products, where it is the largest player in the market. The company said the actual cost of the acquisition will be closer to $235 million if it makes full use of all the tax benefits related to the deal over the next 15 years.
The Sergeant's deal is expected to add about 20 cents per share to Perrigo's adjusted earnings in the first fiscal year after closing.
