AmerisourceBergen To Buy MWI Veterinary Supply For $2.5 Bln

(RTTNews) - Pharmaceutical products distributor AmerisourceBergen Corp. (ABC) has agreed to acquire animal health products distributor MWI Veterinary Supply, Inc. (MWIV) for an equity value of $2.5 billion, the two companies said Monday. The deal will enable AmerisourceBergen to expand into the growing market of animal health.

Under the terms of the merger, AmerisourceBergen will make an all-cash tender offer through a new wholly-owned subsidiary to acquire all of the outstanding shares of MWI at $190.00 per share. The offer price represents an 8.2 percent premium to MWI's closing stock price of $175.65 on Friday.

Boise, Idaho-based MWI Veterinary Supply sells more than 50,000 products, of which over 25,000 are stocked in its distribution centers and sourced from nearly 1,000 vendors. Products sold by the company include pharmaceuticals, vaccines, parasiticides, diagnostics, capital equipment, supplies, veterinary pet food and nutritional products.

Valley Forge, Pennsylvania-based AmerisourceBergen will commence a tender offer for the outstanding shares of MWI common stock by January 26, 2015. The company plans to acquire the shares of MWI that are not tendered into the tender offer through a merger that will be effected as soon as possible after the closing of the tender offer.

AmerisourceBergen plans to finance the transaction through a combination of cash and long-term debt. The company noted that its tender offer is conditioned on MWI's stockholders tendering at least a majority of outstanding shares in the tender offer. The two companies expect the transaction to close during the March quarter of 2015.

AmerisourceBergen expects the acquisition to contribute about $0.08 in adjusted earnings per share to its fiscal 2015 earnings results.

Further, the company anticipates the transaction to generate $50 million in synergies by the end of the third full year, driven primarily by the benefits of AmerisourceBergen's scale and product sourcing opportunities.

MWI said its board of directors has unanimously approved the transaction. The company will file a recommendation statement containing the unanimous recommendation of its board that its stockholders tender their shares to AmerisourceBergen.

Steven Collis, president and CEO of AmerisourceBergen said, "Animal health is a growing market in the U.S. and internationally, and is a logical extension of our pharmaceutical distribution and services businesses. Utilizing AmerisourceBergen's knowledge of manufacturer and provider services, our global reach and partnership philosophy, 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."

For AmerisourceBergen, BofA Merrill Lynch acted as financial advisor, while Cravath, Swaine & Moore LLP provided legal advice.

J.P. Morgan acted as financial advisor to MWI, while Dechert LLP provided legal advice to the company.

ABC closed Friday's trading at $93.00. In Monday's pre-market activity, the stock is up $1.49 or 1.60 percent to $94.49.

MWIV closed Friday's trading at $175.65. In Monday's pre-market activity, the stock is gaining $14.64 or 8.35 percent to $189.90.