Dechra Pharmaceuticals, which makes medicines for pets and livestock, yesterday spent €135m (£112m) buying a smaller Dutch rival that makes drugs for cattle, horses, dogs, pigs, cats and chickens.
The market seemed to approve and shares in Dechra jumped more than 7 per cent. It will pay for Eurovet Animal Health with the proceeds of a £60m discounted rights issue, which is on a basis of three new shares for every 10 existing ones, and a new debt facility.
Dechra hopes to gain from Eurovet's reach in Europe. Eurovet has sales and marketing operations in the UK, the Netherlands, Germany, Belgium and Denmark, and supplies vets in more than 40 countries. Last year, its products, which include antibiotics, vitamins and anaesthetics, brought in sales of €76.8m.
Ian Page, Dechra's chief executive, said: "This is a great opportunity to build on the strong foundation we have created."
Shares in Dechra closed 34.5p higher at 498.5p.