Zoetis signed an asset purchase agreement Dec. 19 with Huvepharma, a European animal health company, for the divestment by Zoetis of two manufacturing sites in the U.S.: Laurinburg, N.C., and Longmont, Colo.
According to a Dec. 22 filing with the Securities & Exchange Commission (SEC), pursuant to the agreement, Huvepharma will also assume the assets and operations and, subject to approval from the lessor, the lease of a Zoetis manufacturing and distribution site in Van Buren, Ark.
Zoetis said its employees at all three sites will transfer to Huvepharma.
The agreement also provides for the divestment by Zoetis of a portfolio of products, most of which are associated with the Laurinburg, Longmont and Van Buren sites. These products include medicated feed additives, water-soluble therapeutics and nutritionals for livestock sold in the U.S. and international markets.
In the SEC filing, Zoetis said it will receive $40 million in cash and additional considerations as part of the agreement, but the transaction is not material to Zoetis Inc.
According to Zoetis, the transaction is an element of the Zoetis operational efficiency program announced on May 5, 2015, which is focused on reducing complexity, optimizing resource allocation and positioning the company for long-term profitable growth. The manufacturing sites to be divested under the agreement are among those Zoetis expects to sell or exit as part of the efficiency program. The products to be divested under the agreement represent a portion of the lower-revenue, lower-margin product stock keeping units that Zoetis expects to eliminate to help improve profitability and enhance the reliability and efficiency of the Zoetis supply network.
Zoetis said it expects to complete the transaction in the first quarter of 2016.
Huvepharma, a privately owned pharmaceutical concern based in Bulgaria, told European media outlets that the product portfolio included medicated feed additives, including Albac (bacitracin zinc; excluding the U.S. market) and Bio-Cox/Salinomax (salinomycin), and Inovocox EM1, a leading vaccine against coccidiosis in broilers.