Non-official translation of the original Swedish press release
Swedencare AB (publ) ("Swedencare") acquires the operations of the American Pet Health company, Animal Pharmaceuticals Inc. ("Animal Pharmaceuticals"). The purchase price amounts to approximately 131 million SEK with a possible additional purchase price of maximum 87 million SEK, dependent on the additional purchase price the cash consideration will consist of approximately 91-178 million SEK and a directed new share issue of 251 994 shares in Swedencare to the seller upon closing, which is expected to take place on October 1st, 2020. Through the acquisition Swedencare will receive a comprehensive product portfolio of supplements and topical products in the premium segment for dogs and cats. The products are currently sold to approximately 8 500 veterinary clinics in the United States.
The acquisition of the business is conditional on certain customary contract terms and is done through a newly established US subsidiary to Swedencare, Animal Pharm Care USA, Inc.
"With the acquisition of Animal Pharmaceuticals, we create a unique group which entails different growth and profitability driven companies within animal health. It's amazing to be able to add yet another outstanding and profitable company to the Swedencare family. I am both excited and humble to the task of leading this expanded group. At the same time, I am very comfortable as we in Jason Braun get access to a competent and experienced colleague who, just like me, thrives by growth and profitability together with customer satisfaction and innovation. Yet another success factor is that the acquired business will be able to realize several synergies with recently acquired Stratford Care USA. Jason, Brian (CEO of Stratford Care USA) and myself have already a plan in place that will be executed the coming months." says Håkan Lagerberg, CEO of Swedencare.
About Animal Pharmaceuticals
The company, founded by Jason Braun in 2003, sells a wide range of products to approximately 8 500 veterinary clinics, making it one of the leaders in the veterinary market in the US. The product range, which is developed in house, covers a number of therapy areas of which dermatology and grooming stands for almost 60%.
The acquired business had sales of 6.2 million USD for the period July 2019 - June 2020, corresponding to approximately 55.6 million SEK, with an EBITDA profit of 2.1 million USD, corresponding to 19,1 million SEK, corresponding to an EBITDA margin of 34%.
The purchase price of 15 million USD with a possible additional purchase price of 10 million USD on a cash- and debt free basis, corresponds to approximately 219 million SEK, is paid initially through a cash payment of 10,4 million USD and a directed new share issue to the seller of 251 994 shares in Swedencare. The additional purchase price, of a maximum of 10 million USD, is based on certain financial conditions, is paid in cash, preliminary in Q4 2020.
The new Animal Pharmaceuticals will be led by Jason Braun, founder and former owner. Jason Braun will also become one of the major shareholders of Swedencare with a shareholding of 251 994 shares.
"Animal Pharmaceuticals has grown and evolved through the industry for over 17 years. At the heart of our company is a passion and drive that we couldn't be more excited to share with an experienced, multinational company like Swedencare Group" says Jason Braun, Animal Pharmaceuticals CEO and founder.
The Swedencare group, as it looks after the acquisition of Animal Pharmaceuticals and British Nutravet (UK) Limited, which have been made public earlier, had for the 12-months period July 2019 - June 2020 (pro forma) revenue of approximately 332 million SEK with an EBITDA of 104 million SEK, equaling to an EBITDA-margin of 31,3%.
Short term synergies are expected within sales and marketing due to the ProDen PlaqueOff® product family of Swedencare, which strategically complements the products of Animal Pharmaceuticals. Swedencare also foresees that the group and Animal Pharmaceuticals quickly will benefit from synergies regarding logistics, administration as well as sales due to Swedencare's newly acquired subsidiary Stratford Care USA.
Further down the line, synergies and opportunities regarding marketing and sales of the whole product range and concept of Animal Pharmaceuticals are expected when introduced to Swedencare's international network of distribution.
"Alongside the acquisition of Stratford this summer Swedencare will, after the two acquisitions made public today, be a new, larger and more forceful company. We will now be one of the leading companies within the global pet health care nutraceutical sector. Not only do we increase substantially, when it comes to revenue, earnings, product range and customer offering, but our team also gains the capacity of Matthew and Jason, two extraordinary entrepreneurs. Three acquisitions within three months means that we basically have cut three years' worth of work in reaching our financial goals and we will therefor communicate new financial goals no later than at the presentation of our year-end report" says Per Malmström, Chairman of the board, Swedencare.
Further information in regards to the acquisition can be found on the website of Swedencare www.swedencare.se, where the proforma group earnings including Animal Pharmaceuticals are presented for the 12 month period July 2019 - June 2020. More information about Animal Pharmaceuticals can be found at www.anmpharm.com
The Law firm Lindahl KB and Pareto Securities AB have assisted Swedencare with advice in the transaction.
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