Putney Inc., a venture-backed pet pharmaceutical company in Portland, announced early Tuesday morning that it was being acquired by a U.K.-based manufacturer of veterinary products.
Dechra Holdings US Inc., the U.S. subsidiary of Dechra Pharmaceuticals PLC, will acquire Putney for $200 million in cash. The acquisition, which is subject to approval from U.S. regulators, is expected to close in April 2016.
Jean Hoffman, a pharmaceutical executive who recognized a need for generic drugs in the veterinary market, founded Putney in 2006. Since then the company has raised $57 million in venture capital and developed several FDA-approved drugs for the veterinary market. In 2015, Putney’s net revenue was $49.6 million, according to the news release announcing Dechra’s acquisition.
“I am incredibly proud of the value that the Putney team has built,” Hoffman said in a statement. “The sale underscores the success of Putney’s commercialized product portfolio and our robust development pipeline, which we have built from the ground up since I founded the company in 2006. Putney is the leader in pet generic drugs by any measure: revenues, pipeline, FDA approvals and market share.”
Hoffman said the acquisition will take advantage of each company’s strengths and create a stronger company.
Dechra is a nearly 200-year-old company based in Northwich, England. Its revenue for its 2015 fiscal year were approximately $300 million.
Putney currently has 62 employees in Portland. Hoffman on Tuesday morning confirmed for Maine Startups Insider that Dechra has committed to keeping the Portland office intact, and she expects the R&D team and many others will remain based here. However, some jobs could be lost as Dechra’s U.S. subsidiary, based in Kansas, absorbs Putney.
“There are likely to be synergies in the usual administrative areas and we don’t know yet what consolidation may happen with some members of the commercial team,” Hoffman said.
Hoffman will depart the company at the close of the sale.
“New title will be ‘free person,'” she said.
What it means
Putney’s acquisition is a significant milestone for Maine’s local business community. Assuming the acquisition is approved, it will mark the third successful exit for a Maine company since December, when a Massachusetts company acquired Portland-based Kepware Technologies for $100 million. That was followed earlier this month when GPS giant Garmin acquired Yarmouth-based DeLorme for an undisclosed amount.
Exits such as these are significant as they represent liquidity events for founders and investors, who realize a return on their financial investments and sweat equity. In cases where founders and early employees still retain significant amount of shares in the company, an exit like Putney’s potentially creates a number of newly wealthy individuals who may be interested in using that capital to launch their own companies or invest in promising local startups.
Hoffman wouldn’t reveal her equity stake in the company, but said she is no longer majority shareholder as she was compelled to sell a good portion of her equity to fund Putney’s R&D efforts. Even so, Hoffman is likely to realize a multi-million-dollar payday at the sale’s close.
One of Putney’s largest investors was Pennsylvania-based Safeguard Scientifics Inc., which has invested $14.9 million in the Portland company since September 2011. In a news release, it revealed that it owns 28 percent of Putney and will receive initial cash proceeds of $58 million from Putney’s acquisition. Another major investor is NewSpring Capital.
Kepware, DeLorme, and now Putney. Such a string of successful exits also sends a signal to out-of-state investors that Maine startups are not as risky as some may think.