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March 15, 2016

Putney sold for $200M to UK veterinary company; founder to leave

Photo / Tim Greenway
Photo / Tim Greenway
Jean Hoffman, founder, president and CEO of Portland-based Putney Inc., which was sold Tuesday.

Putney Inc., a Portland-based veterinary product company, said on Tuesday that it has signed a definitive agreement to sell 100% of the company to Dechra Holdings US Inc., an Overland Park, Kan., subsidiary of UK-based Dechra Pharmaceuticals PLC.

The total consideration payable for Putney amounts to $200 million in cash at completion. The sale is on a debt-free/cash-free basis, which means the seller keeps all the cash and pays off all debt at the time the business is sold. Putney's net revenue was $49.6 million in 2015 and it had 63 employees as of last November.

In addition, Safeguard Scientifics Inc., which had a 28% primary ownership position in Putney before the acquisition and had invested $14.9 million in the vet product firm since September 2011, should benefit handsomely from its exit strategy when the acquisition closes. In a statement, the Radnor, Pa.-based investment firm said it expects to realize $58 million in aggregate initial cash proceeds, which represents almost a 3.9-times cash-on-cash return and a 42% internal rate of return.

"In less than five years since Safeguard first deployed capital into Putney, the company increased its revenue approximately 350%, built out its scientific and medical affairs team, and developed and received FDA approval for 11 veterinary generics," Safeguard President and CEO Stephen T. Zarrilli said in a statement.

The buyer, Dechra Pharmaceuticals PLC, develops, manufactures and sells specialty veterinary pharmaceuticals products. It posted revenue of $300 million for its 2015 fiscal year.

Putney founder Jean Hoffman told Mainebiz that the two U.S. companies will operate as one company. She said the operation in Portland will continue, but she will leave upon closure of Putney's sale. She is not sure if Dechra will keep the Putney name. She does expect Dechra to keep most of the Portland staff, but probably not all of it.

"I've raised more than $60 million in capital for Putney," said Hoffman, who is a minority shareholder. "It was time for the company to move to a mature capital structure. There's a lot of potential and growth here."

She did not disclose how much she will make on the sale. "I will walk out the door with great pride and a little sadness."

Hoffman said she has set up a foundation to help other people build great companies. But first, she plans to take time off with her family, sleep and finally weed her garden.

Of her proudest moment at the company, she sites Putney's first U.S. Food and Drug Administration approval in December 2012 of an antibiotic for dogs called Cefpodoxime.

In a statement announcing the acquisition of Putney, Ian Page, CEO of Dechra Pharmaceuticals, said that the expertise of Putney and its established growth potential were factors in the purchase, and that Dechra is eager to seize the opportunities that Putney has established throughout the years.

"In line with our strategy, the acquisition of Putney will significantly strengthen Dechra's position in the United States and will provide high-quality, FDA-approved veterinary products and strengthen our pipeline," said Page. "We are delighted to secure this unique opportunity which adds scale and additional expertise to our North American business."

Putney was founded in 2006 by Hoffman, its president and CEO. The company has been recognized by numerous publications including Inc., which included the company in its list of fastest-growing companies in 2013. Mainebiz also recognized Hoffman as a 2009 Woman to Watch and a Business Leader of the Year in 2012, and Putney as a runner-up for our selection of 2015's Fastest Growing Company.

"Putney is the leader in pet generic drugs by any measure: revenues, pipeline, FDA approvals and market share," Hoffman said in announcing the purchase. "This combination takes advantage of both Putney's and Dechra's complementary scientific knowledge, regulatory expertise and product development and commercialization skills. In addition, the expanded combined product lines enhance the veterinary channel prowess of the combined company."

The closing of the deal is expected to happen in April, pending approval by U.S. regulators.

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