(Sharecast News) - Eco Animal Health announced the sale of 'ECOmectin Horsepaste' to its manufacturing partner Acme Drugs in Italy on Thursday, for total consideration of €1.3m.
The AIM-traded firm said that as part of a strategic move aimed at refining its focus, ECOmectin Horsepaste - a branded equine parasite treatment featuring the active ingredient ivermectin - had been deemed non-core to its operations for some time.
Under the terms of the transaction, Acme acquired all marketing authorisations held by Eco for ECOmectin Horsepaste, along with associated intellectual property, manufacturing and distribution arrangements, and existing inventory.
The marketing authorisations primarily spanned the UK and EU markets.
Additionally, Acme was granted a trademark licence to market and sell the horse paste under the ECOmectin brand.
The total consideration for the transaction amounted to €1.3m, with €0.5m disbursed on the signing of the sale and purchase agreement.
Acme committed to making two further payments of €0.4m each, with the first instalment due 18 months post-completion and the second 36 months thereafter.
Those deferred payments weer backed by a bank guarantee, which was set to be finalised within 45 days.
For the financial year ended 31 March, revenue generated from the business segment totalled £0.81m, compared to £0.99m in 2023.
The Eco Animal Health board saw the transaction as a pivotal step in refining its focus on core species, particularly pigs and poultry, and advancing its innovative pipeline of vaccines and preventatives.
It said the proceeds from the transaction were earmarked for reinvestment in research and development initiatives to bolster new product development efforts.
"The disposal of ECOmectin Horsepaste is in line with our stated intention of focusing on treatments and preventatives in pigs and poultry and this enables us to increase investment in our research and development pipeline," said chief executive officer David Hallas.
"The brand and the broader business is a good fit for Acme Drugs, and we are pleased that the business will be taken forward by a committed owner.
"We continue to look for value accretive opportunities both within our portfolio and outside and for opportunities to reinvest in our research and development pipeline to support future growth."
At 1120 BST, shares in Eco Animal Health Group were down 1.18% at 84p.
Reporting by Josh White for Sharecast.com.
Eco Animal (EAH)