AIM-listed veterinary products firm Animalcare (ANCR) has agreed a takeover by CPP Paw 2, backed by Charterhouse Capital. The cash offer, at 336p per share or a 36% premium to yesterday’s close, values the business at £235.2 million.
‘A superior outcome’
Animalcare said while it was ‘highly confident’ of its standalone prospects, it had received and considered several approaches in recent years. Having evaluated the offer against its growth strategy, the board believes a takeover represents ‘a superior outcome for stakeholders’.
The group’s aim was to drive revenue growth in the medium term through organic growth, M&A and new products. However, all three strategies require a ‘materially’ higher level of investment than in the past.
The board concluded the time and investment needed to drive organic growth and finance M&A would be better suited to private equity ownership. Similarly, the ‘intensive’ investment cycle to develop new products and prolonged payback period is also better suited to private ownership.
For Charterhouse, the appeal is Animalcare’s ‘balanced and focused’ portfolio of products and its geographic coverage across Europe and Australasia. The private equity group has form investing in healthcare and believes it can leverage its experience to help Animalcare grow.
We haven’t followed Animalcare closely, but porcine vaccine maker Genus (GNS) has most definitely been on our radar. Given nearly half the shareholders are backing this deal, including Harwood Capital with its 18% stake, we can’t see a rival offer emerging.
In terms of multiple, the £235 million price tag represents over 14 times 2025’s forecast EBITDA of £16 million, which seems punchy. Animalcare did have a 2030 EBITDA target of £37.5 million, though, which would drop the multiple to six times.
However, bythe firm’s own admission its 2030 targets carried significant risk so we wouldn’t take them that seriously. More broadly, leaving aside the price, this deal means another successful company is exiting the AIM market.
Read the press release here: https://www.animalcaregroup.com/news/rns/
