REG - Anpario PLC - Acquisition of Bio-Vet Inc.

AnparioAnnouncement

30/09/2024 07:00

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RNS Number : 1231G  Anpario PLC  30 September 2024

Anpario plc

("Anpario" or the "Company")

 

Acquisition of Bio-Vet Inc.

 

Anpario (AIM: ANP), the independent manufacturer of natural sustainable animal
feed additives for health, nutrition and biosecurity, announces that it has
today, subject to closing conditions, completed the acquisition of Bio-Vet
Inc., ("Bio-Vet"), including the land and buildings at its production facility
in Barneveld, Wisconsin, United States for a total net cash consideration of
up to US$7.3m (the "Acquisition").

 

Background to Bio-Vet

Bio-Vet (www.bio-vet.com (http://www.bio-vet.com) ) is a leading producer of
animal health and nutrition products combining the latest research and
real-world experience to deliver innovative solutions to the farmer.
Predominantly supplying the US dairy market, Bio-Vet's solutions focus on
improving health by supporting the animals' natural system as well as
increasing profitability for the farmer, which fully aligns with Anpario's own
vision and value proposition.

 

Bio-Vet developed Capsule-In-A-Capsule™, for direct fed microbials (DFM's)
also known as probiotics, and nutritional combination products.  This
pioneering delivery system has accelerated Bio-Vet's position in the US animal
health industry.  Their product range has since expanded to include capsules,
boluses, pastes, soluble powders, electrolytes and daily fed additives.
Bio-Vet's direct fed microbials account for around half their sales and is
highly complementary with Anpario's existing product range.  There are
synergistic effects when using Orego-Stim® in combination with direct fed
microbials and Bio-Vet's expertise in this area will help deliver a strong
competitive advantage in the market.

 

In the US, Bio-Vet sells directly to farmers, veterinarians and through
resellers to reach the smaller farmer.  Only a small proportion of sales are
currently outside of the US, which is where Anpario's global sales and
distribution network can expand Bio-Vet's market opportunity for its products.

 

Bio-Vet employs over 30 members of staff and operates from a single 25,000
square feet manufacturing facility and offices constructed in 2013 and located
on a 3.45 acres site, suitable for future expansion, offering Anpario an ideal
platform to support its ambitions in the Americas region.  Bio-Vet was
founded by the late Dr William A. Zimmer in 1996 and has built a strong
reputation in the industry for its innovation in the creation and manufacture
of animal microbial and nutrition products uniquely combined with delivery
systems such as Capsule-In-A-Capsule™.

 

Strategic rationale

·      The Acquisition is in line with the Company's strategy, creating
further species diversification into the ruminant sector where, combined with
Bio-Vet's sales team, Anpario can market its complementary ruminant products
including Orego-Stim® and Anpro®.

·      Bio-Vet's direct fed microbials (DFM's/probiotics) range, with
brands including Generator™, brings Anpario a significant new product group
and expertise to develop versions suitable for monogastric species. The global
probiotics in animal feed market was valued at US$4.2 billion in 2022 and is
projected to grow at a CAGR of 9.1% to reach US$7.1 billion by 2028(1), which
is more than four times the size of the global phytogenic feed additives
market.

·      Anpario will also look to expand the international sales of
Bio-Vet's other products, such as its successful calcium bolus supplement
brand QuadriCal®, electrolytes, pastes and soluble powders.

·      The Barneveld production and office facility provides the Company
with options for expansion and potentially local production of Anpario
products providing a strong platform to support our operations in North
America.

·      The US market for on-farm products sold to the smaller commercial
farmer is fragmented and therefore this platform underpins the Group's
ambition to play a role in consolidating the segment, creating further
potential synergies and cross-selling benefits.

 

The Board expects the acquisition to be immediately earnings enhancing for
Anpario.

 

Transaction structure

Anpario Inc., our wholly-owned subsidiary, has acquired 100% of the share
capital of Bio-Vet Inc. for an initial cash consideration of US$6.3m,
including Bio-Vet's excess cash of US$2.3m, on a debt-free basis, plus an
additional earnout consideration of up to US$1.0m in cash subject to the
EBITDA for the 12-month period following completion being not less than
US$0.78m.  A new company, Anpario Real Estate Holdings LLC, has been set up
which will purchase the associated land and buildings for US$2.3m, utilising
the excess cash in Bio-Vet Inc. The acquisition will be funded from the
Group's free cash, which as at 27(th) September, and prior to this
transaction, stood at £13.3m.

 

For the year ended 31 December 2023, Bio-Vet group reported (unaudited)
revenue of US$8.2m, Normalised Profit before Tax* of US$0.7m and net assets
expected to be not less than US$5.4m, subject to completion accounts.

 

*Normalised Profit Before Tax is profit before tax adjusted for non-recurring
or unusual items to reflect the true underlying earnings of the group.

 

 

 

Richard Edwards, Chief Executive Officer of Anpario, commented:

"We are delighted to have acquired Bio-Vet, which is in line with our strategy
of species diversification and bringing significant new product groups to the
portfolio, which can be marketed through our global sales and distribution
network.  The deal also gives us an excellent production facility which makes
us operationally more resilient and acts as a strong platform to support
growth in the Americas region.

 

We look forward to welcoming the Bio-Vet staff and are very pleased that the
current leadership team are remaining with the business in their current roles
as the two companies start to collaborate more closely which had already begun
with the launch of Orego-Stim® to the Bio-Vet sales team in recent weeks."
 

 

 

Note 1: Source MarketsandMarkets Probiotics in Animal Feed Market by Livestock
& Region - Global Forecast to 2028

 

 

Enquiries

 

 Anpario plc
 Richard Edwards, CEO                 +44(0)7776 417 129
 Marc Wilson, Group Finance Director  +44(0)1909 537 380

 Shore Capital
 (Nominated Adviser and Broker):      +44 (0) 20 7408 4090
 Stephane Auton                       Corporate Advisory
 David Coaten
 Tom Knibbs
 Henry Willcocks                      Corporate Broking

 

 

 

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