Bayer to acquire animal health business of US-based KMG Chemicals

16 February 2012 15:36  [Source: ICIS news]

HOUSTON (ICIS)--Bayer has agreed to acquire the animal health business of US firm KMG Chemicals for an undisclosed sum, the Germany-based chemicals major said on Thursday.

Bayer said the acquisition would further diversify its insecticides portfolio in the US, “giving us the opportunity to offer more robust insecticide solutions to livestock and poultry producers."

KMG CEO Neal Butler said the animal health business no longer fitted into the company’s portfolio, which is focused on electronic chemicals and on wood treating chemicals.

In a separate filing with US financial regulators on Thursday, KMG said assets to be sold to Bayer included equipment at a plant at Elwood, Kansas, along with inventory, animal health registrations and other intangible assets.

However, the land and buildings at Elwood, and the businesses' cash, accounts payable and accounts receivable were excluded from the deal and would not be purchased by Bayer, KMG said.

KMG would continue using the Elwood facility to make certain animal health products for Bayer for one year after closing of the deal, with the possibility of two extensions of six months each, it said.

According to information on KMG’s website, the company’s animal health business consists mainly of ectoparasiticides - larvicide, wettable powders, dusts, liquid insecticides, and insecticidal ear tags.

The business’s market share in the US is about 20%.

In the fiscal year ended 31 July 2011, KMG's animal health business recorded operating income of $61,000 (€46,970) on sales of $10.8m - about 4% of KMG's total sales that year. 

KMG entered the animal health market in 2002 with an acquisition from Germany-based pharmaceuticals firm Boehringer Ingelheim.

($1 = €0.77)

By: Stefan Baumgarten
+1 713 525 2653

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