NEWS 14 FEED & ADDITIVE MAGAZINE August 2024 Elanco Animal Health Incorporated completed the divestiture of its aqua business to Merck Animal Health for approximately $1.3 billion in cash, with approximately $1.05-$1.1 billion in net proceeds available for debt paydown in the third quarter of 2024. "Finalizing this transaction marks a significant milestone in concentrating our focus on high-value opportunities in pet health and livestock sustainability while creating balance sheet flexibility. Elanco's positive trajectory, demonstrated by three consecutive quarters of underlying revenue growth, pipeline progress, and our ability to reduce debt, strengthens our value proposition," said Todd Young, Executive Vice President and CFO of Elanco Animal Health. "The proceeds from this transaction, combined with increased free cash flow from our operations, accelerates our deleveraging and positions us to deliver substantial value over time." Elanco explains that the successful completion of this transaction enables it to pay down term loan debt on a pro-rata basis per the terms of the company's credit agreements. Combined with the expected $280 million to $320 million of cash generated from the base business, the company expects to pay down approximately $1.3 to $1.4 billion of debt in 2024, ending the year with net debt to adjusted EBITDA in the mid-4x range. Net debt to adjusted EBITDA is projected to improve further in 2025 to the high-3x to low-4x range. The company will provide additional information about the transaction’s impact on its 2024 financial outlook during the second quarter earnings call in August. Read more>> Elanco completes sale of aqua business for $1.3 billion The Marine Ingredients Organisation - IFFO, an international trade organisation that represents the marine ingredients industry, such as fishmeal, fish oil and other related industries, stated a positive trend in 2024 fish meal and fish oil production thanks to a successful first anchovy season in North Central Peru in its latest market report. In this report, IFFO's analyses of cumulative fishmeal and fish oil outputs through May 2024 are provided. The first 2024 anchovy season in Peru’s north-central fishing zone ended in June with more than 98% of the quota fulfilled. The marine ingredients industry sees this as a very positive sign for the fishing and feed sectors, considering that Peru accounts for around one-fifth of global fishmeal supply in an average year. A second fishing season will take place later in the year, based on independently set quotas taking into account the size of the biomass. In Peru's southern fishing zone, the season ended with slightly more than 10% of the first season’s quota landed. A new quota has been announced for the second season, beginning on 1st July 2024. In the first five months of 2024, cumulative fishmeal production in the countries analysed in IFFO’s report (Peru, Chile, Denmark, Norway, Iceland, North Atlantic, USA, Spain and African countries) increased by 40% compared to the same period in 2023. The significant year-on-year increase of the Peruvian supply was the main factor behind such a positive trend, according to the report. Read more>> IFFO points out positive trend in fish meal and fish oil production
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