Elanco Animal Health Inc has announced the sale of its aqua business to Merck Animal Health for US$1.3 billion in a bid to refocus on other markets.
This will enable Elanco to accelerate debt paydown by US$1.05 billion to US$1.1 billion, the company said on Monday, with the proceeds representing over seven times the estimated 2023 revenue of the hot and cold water species product firm.
“The sale of the aqua business allows us to prioritize our investments in larger markets with greater earnings potential over the medium and long-term, while creating balance sheet flexibility,” chief executive Jeff Simmons commented.
These include the likes of the pet health and livestock sustainability markets, Elanco added, with targeted areas including pet parasiticides, dermatology and pain.
The sale is set to be completed by halfway through the year and will include the aqua firm’s brands, research and development projects and manufacturing sites.
“We believe this acquisition, coupled with our commercial and scientific prowess, will deliver enhanced benefits for our aqua customers,” Merck Animal Health president Rick DeLuca said.
“The addition of this innovative portfolio of cold water and warm water aqua products across vaccines, anti-parasitic treatments, water supplements and nutrition, will establish Merck Animal Health as a leader in aqua.”