» 2000

Animal Health News & Notes for October 6, 2000 10/6/2000

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Brakke Consulting’s
Animal Health News & Notes for October 6, 2000

Copyright © Brakke Consulting, Inc.
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Company News Releases

>  Pfizer agreed to sell the feed-additive products of its Animal Health Group to Philipp Brothers Chemicals Inc.'s Phibro Animal Health unit. Philipp Brothers, along with New York investment firm Palladium Equity Partners, issued a press release disclosing the purchase price of $155 million for Pfizer's feed-additive products.  The transaction includes its Aviax, Banminth, Bloat Guard, CLTC, Coxistac, Mecadox, Neo-Terramycin, OXTC, Rumatel, Stafac and Terramycin product lines. The companies said the transaction is expected to close by the end of the year. (Dow Jones)

>  DirectAg.com announced that Schering-Plough Animal Health Corp. has joined as an e-business partner.  Schering-Plough is the most recent industry leader to join DirectAg.com's animal health community. Through this partnership, producers will be able to purchase Schering-Plough vaccines, insecticides and Ralgro Implants through DirectAg.com.  DirectAg.com will also link directly to Schering-Plough's on-line resources for livestock producers. (PRNewswire)

>  PETCO Animal Supplies, Inc. announced that it has completed the previously announced merger of the company with BD Recapitalization Corp. In the merger, each issued and outstanding share of PETCO common stock was cancelled and converted automatically into the right to receive $22.00 in cash, without interest or any other payment thereon, with the following exceptions: certain shares were retained by members of PETCO's management; treasury shares and shares owned by BD Recapitalization Corp. or by any of PETCO's subsidiaries were cancelled; and shares held by dissenting stockholders were subject to appraisal in accordance with Delaware law. The transaction was led by Leonard Green & Partners, L.P., Texas Pacific Group and members of the company's management. (Business Wire)

>  ABAXIS, Inc. announced it has completed a private financing raising a total of $5.5 million. The company issued convertible preferred stock that may be converted to common stock at a fixed conversion price of $7.00 per share.  The proceeds from the offering will be used for capital expenditures, primarily for its new manufacturing facility, and general working capital purposes. Two of the company's current investors invested $4.5 million, and the management team invested $500,000.  (PRNewswire)

>  Donaldson, Lufkin & Jenrette and IBP jointly announced that Rawhide Holdings Corp. (a wholly owned subsidiary of DLJ Merchant Banking Partners III, a private equity fund affiliated with Donaldson, Lufkin & Jenrette) has reached an agreement to acquire the stock of IBP for approximately $2.4 billion in cash plus the refinancing and assumption of approximately $1.4 billion in debt for total consideration of approximately $3.8 billion.  Once the purchase is completed in early 2001, DLJ Merchant Banking Partners III and affiliated funds will become the majority owner of IBP.  Other investors will include Archer Daniels Midland Company, Booth Creek Partners, and certain IBP management employees. (e-markets – Business Wire)

>  Neogen Corporation announced that its Board of Directors has increased its authorization for Company common stock repurchase, from the previously announced 750,000 shares to 1 million shares.  Neogen has repurchased 627,000 shares since its repurchase program began. Currently, there are 5,682,000 outstanding shares of Company common stock. (PRNewswire)

>  Central Garden & Pet Company announced that it has, through one of its subsidiaries, acquired All-Glass Aquarium Co., Inc., a leading manufacturer and marketer of aquariums and related products. Terms of the transaction were not disclosed. All-Glass has annual sales of approximately $57 million.  Its brands include All-Glass Aquarium and Oceanic Systems. All-Glass was founded in 1967. (Business Wire)

>  Monumental General Casualty now offers a pet health insurance program.  Companion Care helps pay for annual wellness visits, emergencies, prescription drugs and treating illnesses, with premiums based on the dog or cat's age.  Monumental General Casualty is owned by Netherlands-based AEGON Insurance Group, one of the world's ten largest life insurance companies. (Pet Product News)

> Bio-Enhancement Systems Corporation ("BESCORP") announced the establishment of a marketing agreement with Alpha BioRemedies, LLC (Alpha).  Alpha is a US company specializing in the marketing of products to the animal health, veterinary and animal feed industries nationwide in the United States. Under the terms of the marketing agreement with BESCORP, Alpha will serve as a distributor of BESCORP's Animal Behavior Modifier (ABM) product in the US.  The ABM is a device engineered to naturally enhance the weight gain of beef cattle and the milk production of dairy cattle without the use of steroids or growth hormones.  Alpha will distribute the ABM through its established distribution channels within the veterinary, beef range and feedlot markets, dairy operations and specialty animals businesses across the US.  BESCORP's ABM product was launched in Europe in February of 2000.  (PRNewswire)

> PetPlanet.com, Inc. announced that it is changing its name to eMemberDirect, Inc., effective immediately, as part of a strategic repositioning to leverage its Internet business infrastructure and relationships into a multi-channel direct-marketing company offering membership-based consumer and business discount products and programs. eMemberDirect's lead product is the PetVantage Network, announced by PetPlanet.com in June as part of its strategic alliance with Protective Life Corporation Other goods and services offerings will follow and also will be marketed through direct marketing channels such as the Internet, financial institutions, mass merchants, and other providers of consumer services to specific affinity groups. (Business Wire)

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  BRAKKE CONSULTING, INC.

Serving the Worldwide Animal Health and Pet Care Industries

Providing a complete range of consulting services, including:
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Animal Health News

>  Japan's Minister of Agriculture, Forestry & Fisheries (MAFF) announced that the country has gained approval as an "FMD (foot-and-mouth disease) free country" at the FMD and Other Disease Committee Meeting at the World Animal Health Organization (OIE) held in Paris, France.  The OIE decision to grant Japan FMD-free status was made in late September. (AnimalNet – Feedstuffs)

>  The people who are trying to clone a millionaire's dog at Texas A&M University say that before long they will be able to clone your dog, too. For $895, you can bank your pet's DNA at Genetic Savings & Clone, a new commercial cloning outfit in College Station. Be ready to fork over $100 a year to store the DNA sample until A&M scientists perfect pet-cloning technology – a goal scientists say can be reached within months, or maybe years. A genetically identical copy of King or Whiskers can then be yours for a mere $200,000 each.  The company hopes to clone pets for less than $10,000 each within five years of achieving the first successful Missy clone. (Dallas Morning News)

>  Pet owners will be able to travel more easily within the European Union with their domestic pets, especially cats and dogs. The European Commission has adopted a proposal for a regulation harmonizing the health requirements for pets moving from one EU country to another. The proposal reinforces health requirements for pets coming from third countries. The new system will require identification of cats and dogs via electronic microchips or tattoos, obligatory vaccination against rabies and, where necessary, additional checks on the immune response to this vaccination. It will come into force as soon as adopted by European Parliament and Council. (AnimalNet – EC)

 

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Agribusiness News

>  USDA announced Friday it will buy up StarLink corn produced this year, with Aventis agreeing to reimburse USDA for the effort.  Farmers will be compensated to the tune of  around $100 million for the corn, including transportation and other charges. The agreement will be implemented by USDA and EPA.  Aventis, the manufacturer of Starlink corn, will immediately contact farmers with instructions on how to handle the 2000 Starlink crop. USDA will initially purchase the corn from the farmers, handle the corn to ensure that it does not enter the food supply, and then Aventis will reimburse USDA for the cost. (Reuters)

> A federal judge has dismissed a lawsuit by critics of agricultural biotechnology who want the government to require labels on foods made with genetically engineered crops.  The lawsuit challenged the FDA's 8-year-old policy that considers gene-altered crops to be essentially the same as those produced by conventional breeding methods and thus not subject to the same regulatory controls as food additives.  The judge ruled that the biotech critics failed to prove that the FDA violated procedural and environmental laws in establishing the policy, or that the agency should mandate labeling of the foods. (e-markets - AP)

>  A report from the USDA's Economic Research Service (ERS) showed that the share of farms with internet access more than doubled to 29% between 1997 and 1999, and 15% of farms conducted e-commerce transactions for agricultural products.  The report compared the rate of acceptance of e-commerce with farmers' adoption of biotechnology-derived crops when they were first introduced.  (Feedstuffs)

>  Italy's marketing ban on seven types of genetically modified (GM) food cannot be justified on scientific grounds, the European Union's scientific advisory committee on foods has concluded. In enacting the ban, the Italian government had invoked a clause in the EU's "novel foods" regulation allowing member states to impose national restrictions in case of new scientific evidence of environmental and health risks presented by GM foods. Member state representatives are due to discuss Italy's concerns at a meeting of the EU's permanent committee on foods on 18 October. (Chemical Newsflash)

 

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Brakke Consulting Viewpoint

The big news this week centers is the continued consolidations in the animal health, processor and pet markets. Some of the leading brands in the industry will have new shareholders for one reason or another.  It will be interesting to observe how these businesses operate and change in the current financial environment. What will these new owners do that will make these operations a good investment?

We've spent the week in the Midwest watching the harvest of the largest corn and soybean crop in history.   How will this harvest impact your business in the coming months? 


 [Ron Brakke]
 
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