Dechra snared in new London blow

Veterinary drugs maker Dechra is latest firm to quit London stock exchange after agreeing £4.5bn takeover led by private equity outfit EQT

  • Deal will prompt renewed soul-searching about hollowing out of City’s status
  • It means a £15.7m payday for outspoken chief executive Ian Page
  • Britain’s biggest takeover this year, but price 5% lower than offered in April 

Veterinary drugs maker Dechra will become the latest UK growth firm to quit the London stock exchange after agreeing to a £4.5billion takeover led by Swedish private equity outfit EQT.

The deal means a £15.7m payday for outspoken chief executive Ian Page, 62, but will prompt renewed soul-searching about the hollowing out of the City’s status as a host of listed companies.

It is Britain’s biggest takeover this year – but the price is about 5 per cent lower than offered back in April after Dechra’s outlook became dented by a profit warning.

The Cheshire company, which Page has led for more than two decades, makes medicines for pets, farm animals and horses, as well as pet food.

It employs more than 2,500 people worldwide, including 500 in the UK, with headquarters in Northwich as well as sites in Skipton and near Shrewsbury.

Ian Page: Stays on as chief executive as Swedes buy pet drug firm

The business was one of the success stories of the pandemic as people bought pets for company. That drove a surge in its value, propelling it into the FTSE 100. But it has fallen by a third since its peak in 2021 and dropped back to the FTSE 250 index.

Dechra’s chair Elizabeth Platt said that the board believed the new owners would be ‘responsible and supportive’.

They said they have ‘no plans to undertake any material restructurings’ or cut jobs. City figures are trying to re-establish the pre-eminence of London’s capital markets, urging reform to unlock some of the trillions of pounds in UK pension funds, allowing it to be ploughed into growth.

Dechra becomes the latest UK firm to fall into the hands of foreign owners. Software firm Micro Focus was bought by a Canadian rival, while Aveva, another software firm, was swallowed up by France’s Schneider.

London also missed out when Cambridge chip designer Arm decided to float in New York.

There is concern that while Britain is a crucible for innovation, it is failing to reap the benefits when firms seek investment to expand into world leaders – and have to look abroad.

Russ Mould, investment director at AJ Bell, said: ‘The long-term consequences of a hollowing out of the mid-sized universe, from which future giants are likely to be drawn, does not do much for the health of the wider UK market.’

Rochdale-born Page will remain as chief executive. He left school at 16 and worked as a driver, later setting up a business which he sold to Lloyds Chemists, before taking part in a buyout that created Dechra in 1997. It was floated in 2000 with a valuation of £60m.

Page has been cashing in by selling millions of pounds’ worth of shares, including a £10m chunk in 2020. Latest figures put his annual pay at £2m. He and his wife Zoe Bamford control just over 400,000 shares, which will be worth £15.7m under the deal.

Who exactly is EQT? 

EQT was launched in 1994 with the backing of the Wallenberg family – powerful Swedish industrialists – and today manages assets of more than £185bn across 20 countries.

Investments include IVC Evidensia, a chain of veterinary clinics across Europe and North America, with a headquarters in Bristol. It once owned SSP, the operator of airport and railway food concession brands such as Upper Crust.

The firm says it creates value through ‘sales growth, margin expansion and strategic repositioning’. EGT is buying a 74 per cent stake in Dechra, with Luxinva, a vehicle owned by the Abu Dhabi Investment Authority, taking the rest.