April 29, 2024


Zoetis to sell medicated feed additive portfolio to Phibro Animal Health




Zoetis Inc. and Phibro Animal Health Corporation announced on April 28 that they have entered into a definitive agreement where Phibro Animal Health will acquire Zoetis' medicated feed additive (MFA) product portfolio, certain water soluble products and related assets for $350 million, subject to customary closing adjustments.


The transaction is expected to be complete in the second half of calendar year 2024.


The product portfolio, which generated approximately $400 million in revenue in 2023, is comprised of more than 37 product lines that are sold in approximately 80 countries. Also included in the Zoetis-Phibro agreement are six manufacturing sites, four in the United States one in Italy and one in China. More than 300 Zoetis employees who support manufacturing, distribution and commercial activities are expected to transition to Phibro Animal Health.


The transaction demonstrates Zoetis' disciplined capital allocation strategy to focus its investments on solutions for animal health, productivity and sustainability, the company said. With this divestiture, Zoetis can focus its livestock investments in other solutions, including vaccine, biologic and genetic programmes.


"We remain committed to providing innovative solutions to our livestock customers," said Kristin Peck, chief executive officer of Zoetis. "We believe that the long-term value of the transferred portfolio will be fully realised with Phibro Animal Health which will continue to expand its reach given their strong relationships with customers worldwide."


Zoetis' portfolio of MFA and water soluble products across cattle, swine and poultry will complement and expand Phibro Animal Health's species and product portfolios, helping customers meet the highest standards of animal care, prevent disease and enhance nutrition.


On a combined basis for the acquisition, Phibro Animal Health's sales in the last 12 months would have been approximately $1.4 billion. The portfolio is expected to boost Phibro Animal Health's profitability and EBITDA margin and be accretive to its adjusted earnings per share.


The acquisition is expected to be funded primarily with debt, and Phibro Animal Health has received financing commitments from a number of key relationship banks.


"Over a long period of time, Zoetis has built a valuable, high-quality and reliable source of medicated feed additives around the globe," said Jack C. Bendheim, chairman, president and CEO of Phibro Animal Health. "This investment will enhance, diversify and broaden our portfolio globally and help us continue to deliver value to our customers and to our shareholders. We believe our cash generation will allow for continued investment into our higher growth businesses of Nutritional Specialties, Companion Animal and Vaccines. I am confident we have the right capabilities to integrate and strengthen this business. I look forward to collaborating with the Zoetis team and welcoming new colleagues to Phibro Animal Health to support this portfolio."


- Zoetis

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