Digital Angel to Sell Animal ID Biz Destron for $25M
Digital Angel Corporation has agreed to sell Destron Fearing Corporation-its animal identification and emergency identification solutions subsidiary-for $25 million.
The decision comes less than three months after South St. Paul-based Digital Angel said that it planned to focus on its Destron Fearing business.
The buyer is Dallas-based Allflex USA, Inc. The all-cash deal is subject to customary closing conditions, including shareholder approval.
“After exploring all available alternatives and reviewing a number of scenarios with AgriCaptial Corporation, an investment bank hired to evaluate the value of the business and advise the board of directors on its strategic options, it was determined that selling Destron Fearing was the best solution to maximize the value of the business for Digital Angel's stockholders and provide the best opportunity for Destron Fearing employees, partners, and customers,” Digital Angel CEO Joe Grillo said in a statement.
In September, Digital Angel rejected a $17 million buyout offer from Delray Beach, Florida-based PositiveID Corporation. At the time, the company described the offer as “inadequate” and “highly opportunistic” and said that it did not “accurately reflect the value of a company with a annual revenue stream of $35 million to $40 million.”
Then in February, Digital Angel said that it had secured $2 million in short-term financing so that it could “focus on Destron Fearing.” The company said that it would divest “non-core” businesses in 2011 in order to make Destron Fearing its priority.
Two representatives of Digital Angel didn't immediately return Tuesday morning phone messages seeking additional information about the decision to sell Destron Fearing and the affect it will have on employees.
Destron Fearing makes implantable microchips for use in companion pets, livestock identification and traceability solutions, microchips for horses, and transponder tags for salmon fisheries.
Its companion animal chips are about the size of a grain of rice and implanted just underneath the skin between a pet's shoulders. The chip stores the pet's identification number and owner information in a secure database. If a lost pet appears in a shelter or veterinary office, the chip can be scanned and the information from it can be accessed.
According to Digital Angel, there are 70,000 microchip scanners in shelters and vet offices throughout the United States, making it possible for more than 7,000 lost pets to be reunited with their owners each month.
Allflex designs and manufactures animal identification systems for livestock. The company makes electronic tags-which are currently used in more than 1 million head of production livestock animals-and ear tags.
Digital Angel is among Minnesota's 100-largest public companies based on revenue, which totaled $37.7 million in 2010.