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2 June 20233 minute read

DLA Piper advises Dechra Pharmaceuticals on offer by Freya Bidco

DLA Piper has advised Dechra Pharmaceuticals PLC on the recommended cash offer by Freya Bidco Limited (Bidco). The Acquisition values Dechra’s entire issued, and to be issued, ordinary share capital at approximately GBP4.46 billion on a fully diluted basis and implies an enterprise value of GBP4.88 billion, a multiple of approximately 25.9 times Dechra’s EBITDA for the twelve months ended 31 December 2022 of GBP188 million. This also represents a premium of approximately 44 per cent to the Closing Price of 2,690 pence per Dechra Share on 12 April 2023 (the last Business Day before the commencement of the Offer Period).

Dechra was formed 26 years ago and is listed on the Premium Segment of the London Stock Exchange’s Main Market. The Dechra Group is a global developer, manufacturer, and supplier of products to service the veterinary profession worldwide. Its products can be largely split into four main categories - Companion Animal Products, Food producing Animal Products, Equine, and Nutrition.

Bidco is a newly formed vehicle, to be indirectly owned by EQT Funds (74%) and Luxinva (26%), a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) managed by the Private Equities department of ADIA. EQT is a leading global private markets investor focused on active ownership, founded in Sweden nearly three decades ago.

Bidco views Dechra as a high-quality and leading company operating in the attractive animal health pharmaceuticals market, which is expected to benefit from numerous long-term growth drivers including positive demographics, increasing pet ownership, medical innovation, and greater focus on animal care within the family. The company is also considered to have an experienced management team, with a clear vision and strategy for the future direction of the business.

Bidco believes that it can support Dechra’s strong management team in accelerating its long-term growth potential, and that it can provide, where needed, access to additional capital, expertise, and resource to accelerate the longer-term potential of the business. This will enable further investment in its innovative pipeline and execution on its global expansion potential, including via inorganic opportunities. Bidco believes Dechra is better able to achieve its growth potential as a private company than as a public company.

The DLA Piper team that supported Dechra Pharmaceuticals on the sale was jointly led by Corporate Partners Charles Cook and Jon Earle. They were supported by Corporate Legal Director Karin Kirschner and Associate Kirsty Underhill. Litigation & Regulatory partner Sara Smith and Senior Associate Alistair White advised on the anti-trust elements. Employment partner Nick Hipwell and Legal Director Martin Macleod worked on the incentive elements of the deal.

Charles Cook, Corporate partner at DLA Piper, commented “We are delighted to have advised Dechra on this important transaction, which continues a long-standing relationship that started with the firm advising them on their IPO in 2000. This deal represents an exciting next stage in the Groups’ development, and we look forward to seeing its future success”.