Neogen Acquires Insecticide Maker
Neogen Corp. (NEOG) revealed that it has acquired Pleasantville, Iowa-based manufacturer of animal and food insecticides Chem-Tech Ltd. at an undisclosed price (including contingent payment consideration). NEOG has a long-term association with Chem-Tech as it has used the latter’s Prozap trademark for a number of years for some rodenticides.
Chem-Tech is operating for more than 35 years and is wholly owned by Pat and Kelle Rolfes. Several of its insecticides are approved for use in food establishments. One of its well known brands is Prozap, which is extensively used by dairy and equine producers. Its Turbocide products are also gaining popularity for the fogging of food storage and warehouses.
Most of Chem-Tech’s customers are also the customers of Neogen as both of them have a long-term relationship. In the last 12 months, Chem-Tech’s revenues amounted to more than $14 million.
In November last year, NEOG also acquired veterinary instrument maker Prima Tech Incorporated. The Kenansville, N.C.-based Prima Tech started its business in 1998 and has become a major supplier of veterinary instruments in the U.S. and major portions of Europe.
Prima Tech’s products are widely used by farmers, ranchers, and veterinarians to inject animals, provide topical applications, as well as for oral administration. They are also used in artificial insemination in the swine industry. Its other products include animal identification and handling equipment.
Neogen reported second quarter fiscal 2014 earnings per share of 17 cents, lagging the Zacks Consensus Estimate of 25 cents by 47% as well as the year-ago earnings of 19 cents by 10.5%. Revenues in the quarter grew 17.4% to $59.5 million, marginally surpassing the Zacks Consensus Estimate of $59.0 million.
Currently, NEOG carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the medical products industry include Advaxis, Inc. (ADXS), diaDexus, Inc. (DDXS), and Hill-Rom Holdings, Inc. (HRC). All of them carry a Zacks Rank #2 (Buy).
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