2_800x533_L_1412520354.jpg)
(Reuters) - Patterson Cos Inc (O:PDCO) said it would buy privately held Animal Health International Inc for $1.1 billion (£726.6 million) to expand in the fast-growing veterinary products market.
Animal Health makes feed and health products for pets and farm animals, and generated sales of $1.5 billion in the 12 months ended March 2015.
Patterson also said it was looking to sell its medical rehabilitation business. Reuters reported last month that Patterson had hired Bank of America Corp (NYSE:BAC) to assist with the sale.
A sale of the rehabilitation business could fetch between $500 million and $600 million, people familiar with the matter had said.
The $22-billion industry for animal medicines and vaccines is expected to grow 5.7 percent per year from 2011 to 2016, according to a report by Technology Acceleration Partners, a private capital development firm targeting animal health, food and agriculture ventures.
Patterson, which makes dental products, veterinary supplies and rehabilitation medical supplies for hospitals and long-term care facilities, said the Animal Health deal would more than double the size of its veterinary business.
Patterson said it planned to use proceeds from the potential sale of its medical rehabilitation business to reduce the debt incurred to fund the Animal Health deal.
The company said it expects the Animal Health deal and the sale of then medical rehabilitation business to be neutral to its 2016 profit.
BofA Merrill Lynch was Patterson's adviser and Piper Jaffray advised Animal Health International.
Patterson's shares were unchanged in premarket trading after closing at $47.08 on Friday on the Nasdaq.