Dechra’s profit warning could jeopardize the private equity takeover
Medicine and vaccines maker Dechra today issued its second profit warning in three months, putting a possible takeover at risk after a number of US wholesalers reduced inventories of its products.
The company, which acquired ivermectin maker Med-Pharmex last year, warned that “widely reported destocking” in the US hurt its profits in February, but has now said it was longer than previously expected.
As a result, the company now expects a profit of £186m for the year ended June 30 – £2m lower than announced in a February profit warning.
The drug company is currently negotiating a £4.6 billion takeover with Swedish private equity firm EQT. However, with the share price down 7.1% to 3,392p, investors are anticipating EQT could decide against making a firm offer by next week’s deadline.
“The board is confident that despite the unprecedented and by nature short-term trade headwinds, the group remains very well positioned to continue growing in the medium and longer term,” said the Dechra board. “The fundamentals of the business and strategy remain strong, our underlying markets continue to experience structural growth, we continue to grow in our selected markets and we have an established, highly experienced and focused management team.
“Our strategy is robust and includes a very attractive new product development pipeline underpinning our future growth, backed by a strong balance sheet.”
https://www.standard.co.uk/business/dechra-profit-warning-could-put-private-equity-takeover-at-risk-b1082737.html Dechra’s profit warning could jeopardize the private equity takeover