(Reuters) - Generic and over-the-counter drugs firm Perrigo Co PRGO.O said it would buy privately held animal healthcare company Sergeant’s Pet Care Products Inc for $285 million in cash to tap into a resilient and growing market.
Sergeant’s, established in 1868, sells healthcare products for cats, dogs and other pets under the Atlantis, Fur-So-Fresh and Geisler Gourmet brands and will help boost Perrigo’s range of over-the-counter products.
Pet Care is an $8 billion industry that has shown consistent growth through economic cycles, Perrigo said in a statement, noting that consumers are spending a higher proportion of discretionary income on pet care and well-being.
Recent animal health deals include Henry Schein Inc (HSIC.O) buying AUV Veterinary Services to enter the Dutch and Belgian markets, and Bayer buying KMG Chemicals Inc’s KMG.N animal health business.
The largest U.S. drugmaker, Pfizer Inc (PFE.N), separated its animal health unit, which sells medicines, vaccines and other products for livestock and pets, into a standalone company earlier this year.
The Sergeant’s deal is expected to add about 20 cents per share to Perrigo’s adjusted earnings in the first fiscal year after closing. The company also expects to receive tax benefits of about $50 million related to the deal over the next 15 years.
Omaha, Nebraska-based Sergeant’s is expected to have over $140 million in sales for the fiscal year ending September 30.
Perrigo, which was advised by Jefferies & Co Inc on the acquisition, expects to close the deal during the second quarter of 2013.
Shares of Perrigo were trading up about 1 percent at $110.63 in early trading on Wednesday on the Nasdaq.
Reporting by Esha Dey and Vrinda Manocha in Bangalore; Editing by Supriya Kurane