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Friday, December 4, 2020

Elanco [NYSE: ELAN] Finalizes Acquisition Of Bayer Animal Health

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Elanco Animal Health Incorporated [NYSE: ELAN] disclosed Monday it has completed the Acquisition of Bayer Animal Health. The $6.89 billion deal grows scale and capabilities of Elanco, giving the company a long-term position as a leader in an attractive, sustainable animal health industry.

This new acquisition allows Elanco to strengthen its Innovation, Portfolio, Productivity (IPP) strategy, which the firm has been accomplishing on since before its IPO in 2018.

Elanco shares soared 5.26% at $23.63 during the trading of Friday. Elanco Animal Health had recorded the trading volume of roughly 6.92 million as compared to the average volume of 5.04 million.

In the past 52-weeks of trading, this company’s stocks have exhibited the 52-weeks low range of $15.17 and a high range of $33.92. Elanco has moved up 55.77% from its 52-weeks low range and moved down -30.34% from its 52-weeks high range.

Looking at its profitability, its return on assets (ROA) is -1.10%, return on equity (ROE) is -1.70% and return on investment (ROI) is 2.20%. Elanco, Gross Margin is 50.10%, Profit Margin is -3.60% and an Operating Margin is -4.00%.

The acquisition of Bayer Animal Health will expand the pet business of Elanco to approx. 50% of revenues and nearly triple the international pet health business of the firm. Both the firms aimed to generate significant cash flow as a result of the durable industry and resilient portfolos.

If we look at the fincancial term of deal, Bayer AG got $5.17 billion in cash, including profits from the firm’s equity and tangible equity unit issuances in the first quarter of 2020 and debt financing from the Term Loan B priced in the first quarter of 2020 that completed with the deal closing.

Furthermore, apporx. 72.9 million shares of Elanco were issued to Bayer Animal Health AG. These shares will be subject to lock up as the firms is unable to sell shares for the next 90 days. Firms will be able to sell 50% of shares in the next 90 days and remainder shares may be sold after 180 days.

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