Cross Vetpharm again ventures into US market

Privately owned Irish animal health group Cross Vetpharm has purchased a factory operation in Le Sueur, Minnesota - its third acquisition in North America in recent years.

The deal is likely to increase speculation that the firm may soon seek a listing on the Stock Exchange. Company sources suggested last year that Cross Vetpharm would float on the Dublin market after purchasing a number of facilities in the US.

Cross Vetpharm, whose main shareholders are Mr Dan Tierney and Mr Randall Tierney, would not disclose last night how much the deal was worth, but it said the plant would add $13 million (€12.5 million) to turnover.

Based on this, industry analysts said the cash purchase could have cost the firm between $6 million and $10 million.

The Tallaght-based company bought the plant, a solid oral dosage manufacturing facility, from the multinational animal pharmaceutical giant Merial.

Cross Vetpharm said yesterday that the move strengthened the business of its US subsidiary, Bimeda Animal Health. "The purchase of the Le Sueur facility and its associated Osborn branded products will enhance Bimeda's product portfolio, provide us with a manufacturing and developmental base in the United States, and enable us to achieve significant synergies with our other group companies worldwide," said the chief executive, Mr Randall Tierney.

The facility would also reduce Cross Vetpharm's dependence on outsource production, he added.

The US represents 38 per cent of the world market for animal health products and is, therefore, particularly attractive for expansion. Cross Vetpharm said that new products in the US require one set of applications to the regulatory authority, whereas in the European Union, which has a smaller market share, the same process must be repeated 15 times.

In 1997, Cross Vetpharm purchased Innotech, a animal health company based in Kansas City. Last year, the Irish firm bought MTC Animal health, a Canadian firm.

Merial said the divestiture of the facility was part of its "ongoing effort to optimise its manufacturing resources". The company is jointly owned by Merck and Rhone-Poulenc. The company, with headquarters in London, is one of the world's leading animal health company. It has some 6,500 staff and sales of more than €1.6 billion.