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By Dhirendra Tripathi
Investing.com – Shares of Kindred Biosciences (NASDAQ:KIN) jumped 45% in Wednesday’s premarket as the pet therapeutics company agreed to be acquired by Elanco Animal Health (NYSE:ELAN) for $9.25 per share, or $440 million.
Elanco shares rose too, and were up 4% in premarket trading. The company expects the transaction to close in the third quarter of 2021.
The acquisition accelerates Elanco’s expansion in the attractive pet health market, particularly advancing presence in the fast-growing billion-dollar dermatology category.
Dermatologic symptoms such as scratching and allergies are the number one reason pet owners visit the veterinarian today.
The offer price is almost 46% more than KindredBio’s closing price on Tuesday. KindredBio shares were near that mark in premarket trading.
Elanco anticipates the combination will add approximately $100 million to its previously stated innovation revenue expectation of $500 million to $600 million by 2025, with “significant opportunity beyond the period."
The transaction will be "slightly dilutive to the full year 2022" earnings per share, Elanco said in a note.
The company also reaffirmed second quarter 2021 revenue guidance of $1.225 billion to $1.255 billion, and full year 2021 revenue guidance of $4.670 billion to $4.710 billion.