Elanco Animal Health
2500 Innovation Way
Greenfield, IN 46140
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
(Exact name of registrant as specified in its charter)
(State
or other jurisdiction | (Commission
File Number) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (
Not Applicable
(Former Name or Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name
of each exchange on which | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 2.01. | Completion of Acquisition or Disposition of Assets. |
As previously disclosed, on February 5, 2024, Elanco Animal Health Incorporated, an Indiana corporation (“Elanco”) entered into an Asset Purchase Agreement (as amended, modified or supplemented from time to time, the “Purchase Agreement”) with Intervet International B.V., a Dutch private company with limited liability (“Buyer”), pursuant to which Buyer agreed to, subject to the satisfaction or waiver of certain conditions, acquire assets of Elanco’s aqua business (the “Business”) from Elanco or its affiliates for approximately $1.3 billion in cash payable at closing (the “Transaction”).
On July 9, 2024, Elanco, Buyer and their applicable affiliates consummated the Transaction. The purchase price was approximately $1.3 billion in cash, subject to customary post-closing adjustments set forth in the Purchase Agreement.
| Item 7.01. | Regulation FD Disclosure. |
On July 9, 2024, Elanco issued a press announcing the completion of the Transaction, a copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information contained in the accompanying Exhibit 99.1 is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. | Description | |
| 99.1 | Press Release issued by Elanco Animal Health Incorporated, dated as of July 9, 2024. | |
| 104.1 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Elanco Animal Health Incorporated | ||
| Date: July 9, 2024 | By: | /s/ Todd Young |
| Name: Todd Young | ||
| Title: Executive Vice President and Chief Financial Officer | ||
Exhibit 99.1
|
Elanco Animal Health
2500 Innovation Way
Greenfield, IN 46140 |
FOR IMMEDIATE RELEASE
Investor Contact: Katy Grissom (317) 273-9248 kathryn.grissom@elancoah.com
Media Contact: Colleen Parr Dekker (317) 989-7011 colleen.dekker@elancoah.com
Elanco Completes Sale of Aqua Business
Transaction concentrates Elanco’s focus on significant value creation opportunities and accelerates deleveraging progress
GREENFIELD, Ind. (July 9, 2024) - Elanco Animal Health Incorporated (NYSE: ELAN) announced today it has completed the divestiture of its aqua business to Merck Animal Health (NYSE: MRK) for approximately $1.3 billion in cash, with approximately $1.05-$1.1 billion in net proceeds available for debt paydown in the third quarter of 2024.
"Finalizing this transaction marks a significant milestone in concentrating our focus on high-value opportunities in pet health and livestock sustainability while creating balance sheet flexibility. Elanco's positive trajectory, demonstrated by three consecutive quarters of underlying revenue growth, pipeline progress, and our ability to reduce debt, strengthens our value proposition," said Todd Young, Executive Vice President and CFO of Elanco Animal Health. "The proceeds from this transaction, combined with increased free cash flow from our operations, accelerates our deleveraging and positions us to deliver substantial value over time."
The successful completion of this transaction enables the company to pay down term loan debt on a pro-rata basis per the terms of the company's credit agreements. Combined with the expected $280 million to $320 million of cash generated from the base business, the company expects to pay down approximately $1.3 to $1.4 billion of debt in 2024, ending the year with net debt to adjusted EBITDA in the mid-4x range. Net debt to adjusted EBITDA is projected to improve further in 2025 to the high-3x to low-4x range. The company will provide additional information about the transaction’s impact on its 2024 financial outlook during the second quarter earnings call in August.
ABOUT ELANCO
Elanco Animal Health Incorporated (NYSE: ELAN) is a global leader in animal health dedicated to innovating and delivering products and services to prevent and treat disease in farm animals and pets, creating value for farmers, pet owners, veterinarians, stakeholders and society as a whole. With nearly 70 years of animal health heritage, we are committed to helping our customers improve the health of animals in their care, while also making a meaningful impact on our local and global communities. At Elanco, we are driven by our vision of Food and Companionship Enriching Life and our Elanco Healthy Purpose– all to advance the health of animals, people, the planet and our enterprise. Learn more at www.elanco.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements include, without limitation, statements regarding the expected financial impacts of the divestiture, plans for using the cash we receive in the divestiture, the impact of the divestiture on our business and financial results, and expected financial results for 2024 and 2025. There are a number of important factors that could cause actual events to differ materially from those suggested or indicated by such forward-looking statements, including our ability to recognize the expected financial and cash generation benefits of the transaction; the impact of disruptive innovations and advances in veterinary medical practices, animal health technologies and alternatives to animal-derived protein; changes in regulatory restrictions on the use of antibiotics in farm animals; the success of our research and development and licensing efforts; unanticipated safety, quality of efficacy concerns and the impact of identified concerns associated with our products; the lack of availability or significant increases in the cost of raw materials; risks related to the evaluation of animals; manufacturing problems and capacity imbalances; and actions by regulatory bodies, including as a result of their interpretation of studies on product safety. For information about other factors that could cause actual results to differ materially from forward-looking statements, please see the company’s latest Form 10-K and Form 10-Qs filed with the Securities and Exchange Commission. Although we have attempted to identify important risk factors, there may be other risk factors not presently known to us or that we presently believe are not material that could cause actual results and developments to differ materially from those made in or suggested by the forward-looking statements contained in this press release. We caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this press release. Any forward-looking statement made by us in this press release speaks only as of the date thereof. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or to revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.