Phibro Animal Health Corporation’s recent agreement with Zoetis Inc. marks a significant development in the animal health sector. Under the terms of the deal, Phibro will acquire Zoetis’ medicated feed additive (MFA) product portfolio and certain water soluble products for $350 million.
The acquired portfolio, which generated approximately $400 million in revenue in 2023, comprises more than 37 product lines sold in approximately 80 countries. Additionally, six manufacturing sites, including facilities in the U.S., Italy, and China, will transition to Phibro Animal Health. Over 300 Zoetis colleagues supporting manufacturing, distribution, and commercial activities will join Phibro.
This strategic move aligns with Zoetis’ commitment to streamline its investments and focus on innovative solutions for animal health, productivity, and sustainability. By divesting this portfolio, Zoetis aims to redirect its livestock investments toward vaccine, biologic, and genetic programs.
For Phibro Animal Health, the acquisition represents an opportunity to complement and expand its species and product portfolios. The company expects the transaction to enhance its profitability and EBITDA margin, contributing to its Adjusted Earnings Per Share. Financing for the acquisition will primarily be through debt, with net leverage targeted to reach below 3.0x by fiscal year end June 30, 2027.
Jack C. Bendheim, Chairman, President, and CEO of Phibro Animal Health, expressed confidence in the integration of Zoetis’ business, emphasizing the potential to deliver value to customers and shareholders. He highlighted Phibro’s commitment to continued investment in higher growth segments like Nutritional Specialties, Companion Animal, and Vaccines.
Both Zoetis and Phibro Animal Health are committed to ensuring a smooth transition for their colleagues and customers. The acquisition is expected to be completed in the second half of calendar year 2024.
The story underscores the dynamic nature of the animal health industry and the strategic decisions made by key players to enhance their market positions and offerings.
