Eli Lilly & Co. will file a registration statement with SEC for a potential initial public offering of a minority ownership stake in Elanco Animal Health as a separate company.

Sarah Muirhead 1, Editor, Feedstuffs

July 24, 2018

2 Min Read
Lilly to initiate IPO for Elanco Animal Health

Eli Lilly & Co. announced that the company has completed its strategic review of Elanco Animal Health and will file a registration statement in the coming weeks with the U.S. Securities & Exchange Commission (SEC) for a potential initial public offering (IPO) of a minority ownership stake in Elanco as a separate company.

In making the announcement, Elanco said the offering is expected to represent an ownership stake of less than 20%. The number of shares to be offered and the price range for the offering have not yet been determined. The company expects to complete the IPO process during the second half of 2018.

Last October, Lilly made public that it was reviewing strategic alternatives for its Elanco Animal Health business, including an IPO, merger, sale or Lilly’s retention of the Elanco business. At the time, Lilly chief executive officer and chairman Dave Ricks said, "We are announcing a strategic review of our Elanco Animal Health business. Elanco has developed into a premier animal health company and has been an important growth driver and source of revenue diversification for Lilly. Through acquisitions and organic growth, we’ve grown Elanco to a size and scale that now allows us to consider a variety of options to maximize future value.”

Recent acquisitions over the last several years, including Novartis Animal Health and Boehringer Ingelheim Vetmedica’s U.S. vaccines portfolio, have expanded Elanco's product offerings across both companion and food animal segments and knowledge services.

In announcing its plans for an IPO, Lilly said July 24 that it will continue to consolidate Elanco in its financial results. Lilly said it plans to divest its remaining ownership through a tax-efficient transaction. Execution of the IPO is dependent upon – and subject to – a number of factors and uncertainties, including business and market conditions, the company said.

"Based on our strategic review, we concluded that after-tax value for Lilly shareholders would be maximized by pursuing an initial public offering of Elanco," Ricks said. "We believe this will allow Elanco to efficiently deploy its resources to those growth opportunities that best serve its customers. In addition, this will provide Lilly even greater focus on the human pharmaceutical business to pursue our purpose of creating life-changing medicines for patients."

"With more than six decades of expertise in animal health, we are prepared to take this step to become an independent company," Jeffrey Simmons, president of Elanco Animal Health, said. "With a sole focus on animal health, we will help our customers address the greatest challenges of keeping animals healthy and together advance a vision of food and companionship-enriching life."

Elanco, headquartered in Greenfield, Ind., operates in more than 70 countries and has 6,500 employees worldwide.

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