Zoetis to sell medicated feed additive portfolio to Phibro Animal Health

Zoetis (ZTS) and Phibro Animal Health (PAHC) announced that they have entered into a definitive agreement where Phibro Animal Health will acquire Zoetis’ medicated feed additive product portfolio, certain water soluble products and related assets for $350M , subject to customary closing adjustments. This transaction is expected to be complete in the second half of calendar year 2024. Both Zoetis and Phibro Animal Health have a longstanding commitment to the production animal health sector. The acquired product portfolio, which generated approximately $400M in revenue in 2023, is comprised of more than 37 product lines that are sold in approximately 80 countries. Also included in the agreement are six manufacturing sites, four in the U.S., one in Italy and one in China. More than 300 Zoetis colleagues who support manufacturing, distribution and commercial activities are expected to transition to Phibro Animal Health. On a combined basis for the acquisition, Phibro Animal Health sales in the last twelve months would have been approximately $1.4B. 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. Phibro Animal Health expects to have net leverage of 3.5-4.0x Debt / Adjusted EBITDA at close and will target net leverage of below 3.0x by its fiscal year end June 30, 2027.