Lextron, Inc., a Colorado-based distributor of livestock vaccines and supplements, announced its plans to buy competitor Animal Health International, Inc., for about US$251 million.
In a joint statement released this week the companies stated that privately-held Lextron will pay US$4.25 a share for all outstanding Animal Health stock or approximately $111 million plus assume $140 million of Animal Health’s debt.
According to John Adent, President and CEO for Lextron, “This merger provides an opportunity for us to collectively create the country’s premier animal health business.”
“Building upon Lextron’s four-decade presence in this industry, we are confident about the combined pool of industry expertise and resources we’ll be able to offer our customers moving forward,” he added.
The buyout is expected to close by June 30, 2011, subject to Animal Health stockholder approval, antitrust clearance and certain other customary closing conditions. The new combined company will operate under the umbrella of the Animal Health International, Inc. name. Leonard Green & Partners, a Los Angeles-based private equity firm, will help fund the transaction, the companies said.
Lextron’s planned purchase price, at $4.25 a share, would be a premium of 11% over Animal Health’s $3.83 closing price March 11. In afternoon trading March 14, (the day the companies announced the merger) Animal Health shares rose 37.5 cents, or 9.8%, to $4.205. The stock is up 46% this year.
Two law firms, Briscoe Law Firm and Powers Taylor, LLP, said they are investigating potential legal claims against Animal Health’s board of directors that the purchase price is too low The firms are looking into whether Animal Health’s board “obtained the best value for shareholders, adequately considered all viable alternatives, and properly shopped the company before entering into the acquisition agreement with Lextron.”