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Notable Mergers and Acquisitions of the Day 02/01: (PRGO) (WM) (PC)

February 1, 2013 10:23 AM EST Send to a Friend
* Perrigo Company (Nasdaq: PRGO) signed a definitive agreement to acquire Yardley, PA based Velcera, Inc. for $160 million in cash. The acquisition is expected to close during calendar year 2013 pending the satisfaction of closing conditions, including regulatory approvals.

Velcera is a leading companion pet health product company committed to providing consumers with best-in-class pet health products that contain the same active ingredients as branded veterinary products, but at a significantly lower cost. Velcera's products, including the PetArmor flea and tick products, are available at major retailers nationwide, offering consumers the benefits of convenience and cost savings while providing high-quality care for their pets. Velcera marks Perrigo's second acquisition in the emerging OTC companion animal healthcare market, having recently acquired Sergeant's Pet Care Products, Inc. in October 2012.

Velcera, together with major retail partners, has been instrumental in developing an OTC market for pet health products traditionally dispensed only by veterinarians. Retail sales of the PetArmor franchise exceeded $100 million during calendar year 2012, the value-brand's first full year on the market, having launched in April 2011. Velcera sales for the calendar year 2012 were approximately $60 million. The PetArmor® franchise brand will be supported by a number of pipeline product candidates in both flea and tick and health and wellness categories that will continue to bring additional vet technologies to the hands of consumers in the mass market.

Assuming the transaction allows for a full twelve months of sales in fiscal 2014, Velcera is expected to be $0.11 accretive to adjusted EPS and neutral to marginally dilutive to GAAP EPS after the inclusion of intangible amortization, transaction and integration related expenses. The transaction is expected to be ROIC accretive in fiscal 2015.

* Waste Management, Inc. (NYSE: WM) today announced that its subsidiary, WM Recycle America, L.L.C., has acquired Greenstar, LLC from NTR plc. The acquisition will provide Waste Management’s customers with greater access to recycling solutions by adding the operations of one of the nation’s largest private recyclers to Waste Management’s already extensive recycling network.

In 2012, the acquired operations of Greenstar and its subsidiaries managed approximately 1.5 million tons of recycled material for over 12,000 customers through 12 material recovery facilities, including seven single-stream plants, and a brokerage business for recovered material. With this acquisition, Waste Management will have capacity to manage approximately 15 million tons annually of recyclable materials for municipal, industrial, and commercial customers.

This acquisition aligns with Waste Management’s financial goals of growing earnings, expanding margins, increasing free cash flow, and increasing returns on invested capital. Operational activities at these facilities will continue as normal while integration with WM proceeds in the weeks ahead.

* Late Thursday, Panasonic Corp. (NYSE: PC) was said to be considering various options for its LSI operations.

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