|AmerisourceBergen CEO Steven Collis|
Drug distributor AmerisourceBergen ($ABC), which has been doing deals to expand its scope geographically, has decided its next step will be to move into distributing veterinary drugs.
The company Monday said it would acquire MWI Veterinary Supply ($MWIV) for $2.5 billion, or $190 a share. The Idaho-based MWI distributes more than 50,000 products, drugs and equipment, to veterinary clinics in the U.S. and U.K. The companies expect to close the deal during the first quarter.
"MWI is the premier supply chain company in animal health, with leading positions in both the companion and production markets, and we are very excited to have them join AmerisourceBergen," AmerisourceBergen CEO Steven H. Collis said in a statement. "Animal health is a growing market in the US and internationally, and is a logical extension of our pharmaceutical distribution and services businesses."
AmerisourceBergen said it expects to cut about $50 million in costs from the combined operations within three years. That will come primarily from AmerisourceBergen being able to use its scale to source products more cheaply. It said it expected to add 8 cents a share in earnings this year as a result of the new operations.
AmerisourceBergen has been investing for a couple of years to expand its international reach. Last year it paid $110 million for a 20% stake in Brazilian drug distributor Profarma Distribuidora de Produtos Farmacêuticos (Profarma). In 2013 it broke into Europe with a deal to distribute drugs for Walgreens ($WAG) and Alliance Boots.
- here's the press release