Parsippany-based Zoetis Inc. announced Wednesday morning that it is acquiring veterinary instrument maker Abaxis Inc. for approximately $2 billion, enhancing its presence in the veterinary diagnostics sector.
The animal health company said in a news release that, under the terms of a definitive merger agreement, it will pay $83 per share in cash to the Union City, California-based company’s stockholders.
Abaxis, which makes diagnostic instruments and consumable discs, kits and cartridges for the animal health industry, had revenue of $244.7 million in its fiscal year ended March 31, up 8 percent from the prior year, according to the release.
“This acquisition brings Zoetis a company that has a proven, competitive diagnostic platform for growth that we can help to accelerate in the U.S. and worldwide with our global scale and direct customer relationships in approximately 45 countries,” Juan Ramón Alaix, Zoetis’ CEO, said in a prepared statement. “Together, we can bring more veterinarian customers a broader range of products that fit into our comprehensive solutions and innovations, from prediction and early detection of disease in animals to prevention and treatment. We are very excited by the passion for customers that Abaxis and Zoetis colleagues share.”
Zoetis said it expects the diagnostics category to continue to grow faster than the animal health industry as a whole, driven by international adoption of point-of-care diagnostic instruments.
“We see a prime opportunity to grow our business as part of Zoetis,” Clint Severson, Abaxis’ chairman and CEO, said in a statement. “We recently invested in expanding operations in Europe, Latin America and the Asia Pacific region, with 20 percent of revenue in fiscal year 2018 coming from our international operations. Zoetis has the global presence and direct veterinary customer relationships to deliver greater value to more customers around the world and accelerate the growth of our international operations.”
The transaction is expected to close by year-end, subject to customary conditions and approvals.
Wachtell, Lipton, Rosen & Katz is serving as Zoetis’ legal adviser, while Guggenheim Securities and Barclays are acting as financial advisers. Cooley LLP is Abaxis’ legal adviser, while Piper Jaffray is acting as its exclusive financial adviser.