Veterinary and animal pharmaceutical company Dechra Pharmaceuticals (DPH) has made a radical change to its business by selling off its veterinary services business to US-firm Patterson Companies Inc for £87.5m. The deal, which is subject to shareholder approval, will help the company to largely clear its £102m net debt and allow it to concentrate on its much higher margin pharmaceutical business.
Chief executive Ian Page said that for a number of years Dechra had been looking to split off its two main businesses and become much more focused on animal medicines. The service business makes up about 70 per cent of Dechra's £315m annual sales, but only a quarter of the company's operating profits. "For a number of years the services business has been contributing less as a proportion of total profits and the discussions with Patterson seemed like an ideal opportunity to split it off," said Mr Page.
