Acquisition of Bio-Vet Inc.

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) 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 2028¹, 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	[phone]
Marc Wilson, Group Finance Director	[phone]
Shore Capital
(Nominated Adviser and Broker):	[phone]
Stephane Auton	Corporate Advisory
David Coaten
Tom Knibbs
Henry Willcocks	Corporate Broking

 

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