ALLEGAN — Perrigo Co. plc plans to see off its animal health business for $185 million in cash to PetIQ LLC, an Eagle, Idaho-based pet health and wellness company.
The company today said it signed a definitive agreement with PetIQ. The deal comes as Perrigo, which is domiciled in Dublin, Ireland, but run from Allegan, transforms itself into a consumer-focused company.
“We are pleased to have reached an agreement with PetIQ on selling our Animal Health business and look forward to working with them to ensure a seamless transition,” Perrigo CEO and President Murray Kessler said in a statement. “This divestiture helps us focus our portfolio on the consumer self-care market. In PetIQ’s hands, we have no doubt the Animal Health business will be in a strong position to execute on its strategy.”
Perrigo’s animal health business generated $93.9 million in net sales in 2018, down from $141.3 million in 2017, with adjusted earnings of 8 cents per share. The deal should close in the third quarter.
The company entered the animal health business in the 2000s through a series of acquisitions made under then-CEO Joe Papa. The division includes the PetArmor, Sentry and Sergeant’s brands.
Perrigo announced the deal today just prior to reporting first quarter sales of $1.17 billion, down slightly from $1.21 billion in the same period a year earlier. Perrigo recorded $63.9 million in quarterly net income, or 47 cents per diluted share, which compares to $80.8 million, or 57 cents per diluted share, in the first three months of 2018.
William Blair & Co. served as financial adviser to Perrigo, which was advised by the law firm of Morgan, Lewis and Bockius LLP of Philadelphia, Pa.
PetIQ (Nasdaq: PETQ) today reported first quarter sales of $148.4 million with net income of $2.3 million.
EDITOR’S NOTE: This story was updated with details from Perrigo’s first quarter earnings release.