MWI Veterinary Supply Inc., one of the largest U.S. wholesalers of animal health products, has reached a tentative agreement to be acquired by AmerisourceBergen Corp., a leading distributor of human drugs.
The $2.5 billion deal is subject to the approval of MWI shareholders but is expected to close by March, the companies announced today.
The transaction would put AmerisourceBergen in the veterinary sector for the first time. The Chesterbrook, Pa., company has nearly $120 billion in annual global revenue and employs about 14,000 people.
MWI, founded in 1976 by Millard Wallace Ickes, DVM, projects fiscal 2015 revenue of $3.2 billion from the distribution of companion animal, equine and livestock veterinary products in the United States and the United Kingdom.
“Animal health is a growing market in the U.S. and internationally and is a logical extension of our pharmaceutical distribution and services businesses,” said Steven H. Collis, AmerisourceBergen’s president and CEO.
“Combined with MWI’s expertise in veterinary and agricultural markets, we will collaboratively launch the next generation of superior animal health products and services together,” he added.
The all-cash transaction, which won the unanimous endorsement of the MWI board of directors, is valued at $190 a share, an 8 percent bump over the closing price Friday of $175.65.
MWI President and CEO Jim Cleary called the takeover “a terrific opportunity for MWI and our stakeholders.”
“I have been very impressed with the AmerisourceBergen team, and we look forward to working together as we continue to grow in the animal health market,” Cleary said.
MWI, based in Boise, Idaho, expanded in 2013 with its $67 million acquisition of a competing veterinary distributor, IVESCO Holdings.
AmerisourceBergen’s purchase of MWI faces potential legal hurdles. The Dallas-based securities litigation firm Powers Taylor reported today that it is looking into the deal.
“The investigation centers on whether MWI’s board of directors is acting in the shareholders’ best interests, whether the board considered alternatives to the acquisition, and whether the board has employed an adequate process to review and act on the proposed transaction,” Powers Taylor stated.
Another law firm, Rigrodsky & Long of Wilmington, Del., later announced a similar investigation.