Perrigo Company has signed a deal to buy all the assets of Sergeant’s Pet Care Products, Inc for $285 million in cash. Pet Care is a Nebraska-based manufacturer of OTC companion animal healthcare products.
Perrigo aims to receive larger tax benefit as a result of buying assets of Sergeant. This increase in basis is likely to result in cash tax savings to Perrigo over the next 15 years.
The net present value of this tax benefit is estimated to be around $50 million. The acquisition is anticipated to close during the company’s fiscal 2013 second quarter.
Perrigo Chairman and CEO Joseph C. Papa said, “This acquisition allows us to penetrate the pet care category by offering numerous flea and tick, health and well-being and consumable products to pet owners at affordable prices.” Mr. Joseph also said, “Sergeant’s has proven record of innovation, high-quality manufacturing with great customer service. We welcome Sergeant’s two hundred-plus employees and over one thousand SKU’s to the Perrigo family.”
The manufacturer and marketer of over-the-counter drugs intends to fund the transaction using cash on hand.
Perrigo Company is a manufacturer of private label over-the-counter pharmaceuticals in the U.S. It is engaged in manufacturing and sale of consumer healthcare products, generic prescription drugs, active pharmaceutical ingredients and consumer products.