Merck Animal Health, a subsidiary of Merck & Co. (MRK) , will become the largest animal health company in Brazil and close to the biggest in the world after acquiring an animal health products provider there for $400 million.
Merck announced July 1 that it has acquired a 93% stake in Motes Claros, Brazil-based Vallée.
According to analyst Louise Chen of Guggenheim Partners, Merck paid 2.9 times Vallée’s annual sales. She estimates that Vallée’s annual sales to be between $125 million and $150 million.
“With this deal, Merck may become the number one animal health company, with respect to sales, in Brazil,” Chen wrote in a note. “That said, we continue to expectZoetis (ZTS) to be the leading Animal Health company worldwide for the foreseeable future.”
Chen added that prior to the deal, Vallée was the second-largest animal health company in Brazil behind Ourofino.
According to Merck Animal Health’s president, Rick DeLuca, the deal provides Merck with an opportunity to expand in Latin and South America while growing its already large portfolio of animal products.
“Merck Animal Health has a broad portfolio of products to protect against some of the most important pathogens affecting livestock,” DeLuca said in the announcement. “We are pleased to complement our portfolio with products from Vallée, which will further strengthen our presence in Latin America and help us respond even more quickly and effectively to the region’s needs.”