Elanco strengthens global operations with key UK manufacturing acquisition

Elanco Animal Health Incorporated has bolstered its global supply chain by acquiring a contract manufacturing facility in Speke, United Kingdom, previously owned by TriRx Speke Ltd. The move ensures uninterrupted production of critical farm animal products, which contribute approximately $160 million to $180 million in annual revenue, predominantly from markets outside the United States. This acquisition solidifies Elanco’s position as a global leader in animal health, enhancing its capacity to meet the needs of farmers and veterinarians worldwide.

Elanco, a company with nearly 70 years of experience in animal health, made a strategic investment of $25 million in cash to secure the Speke facility and its assets. This purchase comes after the company supported the site financially during its trading administration, a formal insolvency process in the United Kingdom. By transitioning from a long-term supply agreement with TriRx Speke Ltd. to full ownership, Elanco has safeguarded a vital segment of its operations, ensuring stability for its farm animal product lines.

The newly acquired facility will allow Elanco to continue producing key products that play an essential role in its farm animal portfolio. As of the acquisition’s closing, Elanco has assumed full ownership of the site and is working closely with its leadership to maintain operational continuity. This acquisition underscores the company’s commitment to strengthening its supply chain while reinforcing its global footprint.

Financial implications of the acquisition

While the acquisition of the Speke facility secures critical supply chain components, it is expected to create short-term financial challenges. Elanco has projected an adjusted EBITDA impact of $25 million to $35 million in 2025, mainly affecting gross profit. This anticipated headwind reflects the operational and integration costs associated with assuming control of the facility.

Despite these challenges, Elanco’s recent financial results for the third quarter of 2024 demonstrate the company’s resilience. With a reported revenue of $1.03 billion and adjusted EBITDA of $163 million, representing 15.8% of revenue, the company continues to perform strongly. Adjusted earnings per share for the quarter stood at $0.13, while a $640 million pre-tax gain from the divestiture of its aqua business in July 2024 further bolstered financial stability.

Looking ahead, Elanco has tightened its guidance for the full year 2024, now projecting revenue between $4.42 billion and $4.45 billion, with adjusted EBITDA ranging from $900 million to $930 million. These figures reflect the company’s focus on maintaining steady growth while navigating operational adjustments.

Innovation driving growth in animal health

In addition to expanding its manufacturing capabilities, Elanco is advancing its innovation pipeline to drive growth in both farm animal and pet health markets. The recent U.S. FDA approvals of Zenrelia and Credelio Quattro highlight Elanco’s commitment to delivering cutting-edge solutions that address the needs of pet owners and veterinarians in key markets.

The company remains optimistic about its future growth prospects. In 2025, Elanco expects mid-single-digit organic revenue growth, with innovation playing a significant role in driving market expansion. However, this growth will be tempered by expected headwinds from the Speke acquisition and other operational adjustments.

Elanco’s acquisition of the Speke manufacturing facility underscores its strategic vision to secure critical supply chain components while reinforcing its position as a leader in the global animal health sector. Although the financial impact of this move will be felt in the short term, it positions the company for long-term success, benefiting farmers, veterinarians, and pet owners alike.