Pharmaceutical distributor AmerisourceBergen will stretch its reach into veterinary medicine by spending about $2.5 billion to acquire MWI Veterinary Supply.
AmerisourceBergen Corp. said Monday that it will pay $190 in cash for each share of MWI, a premium of 8 percent to the closing price of MWI shares on Friday, the last trading day before the deal was announced. The deal value includes $76 million in MWI Veterinary Supply debt.
AmerisourceBergen distributes prescription drugs and also provides pharmaceutical consulting, but the Chesterbrook, Pennsylvania, company had no animal health business before this deal. Boise, Idaho-based MWI Veterinary Supply Inc. sells animal health products in the United States and United Kingdom.
AmerisourceBergen CEO Steven H. Collis said in a statement that animal health is a growing market both in the United States and internationally, and adding that business is a “logical extension” of his company’s pharmaceutical distribution work.
The companies expect to close the deal early this year. AmerisourceBergen will start its offer to buy the shares later this month, and the deal is contingent on MWI shareholders tendering at least a majority of the company’s outstanding shares.
AmerisourceBergen said the deal will add about 8 cents per share to its fiscal 2015 adjusted earnings. It expects to finance the purchase with cash and long-term debt.
Shares of MWI jumped more than 8 percent, or $14.35, to $190 – the offered price – about an hour before the market open on Monday. AmerisourceBergen stock rose $1.21 to $94.21, a sign that investors like the deal.
AmerisourceBergen shares had already jumped 28 percent last year, more than doubling the 11.4 percent advance of the Standard & Poor’s 500 index. In contrast, MWI Veterinary Inc. shares fell slightly last year.
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