Perrigo (PRGO) to Buy Yokebe Brand; Boost EU Presence - Analyst Blog
Perrigo Company Public Limited Company PRGO has entered into an agreement for the acquisition of Naturwohl Pharma GmbH along with its leading German dietary supplement brand, Yokebe.
The deal, slated to close in the third quarter of 2015, is expected to be accretive to the company’s calendar 2015 adjusted earnings per share and exceed its ROIC threshold in calendar year 2016.
The company said that the brand is expected to generate net sales of about €30 million in full-year 2015. Yokebe, which is marketed within the ‘meal replacement’ category, is the second largest dietary brand (by market share) in Germany.
The deal is in line with the company’s 'Base Plus Plus Plus' strategy, focused on the expansion of the company’s durable base business by pursuing selective, accretive transactions.
We note that earlier this year Perrigo acquired Omega Pharma in a cash-and-equity transaction valued at approximately €3.8 billion. The acquisition has placed Perrigo among the top-five global OTC health care companies by revenue and will allow the company to capture additional share of the $30 billion European OTC market.
Perrigo also entered into an agreement to acquire GlaxoSmithKline’s GSK portfolio of established OTC brands in Jun 2015. This transaction is expected to be completed in the third quarter of 2015 and be immediately accretive to the company’s calendar 2015 adjusted earnings per share. Net sales from the acquired brands in 2014 were approximately $110 million.
Perrigo currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Ligand Pharmaceuticals Incorporated LGND and AMAG Pharmaceuticals, Inc. AMAG each sporting a Zacks Rank #1 (Strong Buy).
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