Eli Lilly and Co. is buying a privately held, poultry vaccine maker to strengthen its Elanco animal health subsidiary.
No terms were released, but Indianapolis-based Lilly said Monday that its 2014 earnings forecast will be trimmed due to acquisition costs.
Lilly will acquire all assets of Germany-based Lohmann SE and its subsidiary, Lohmann Animal Health. The assets include a range of vaccines and feed additives, commercial capabilities, and manufacturing sites in Cuxhaven, Germany, and in Winslow, Maine.
Lilly said that the acquisition will significantly increase Elanco's ability to make vaccines. Competing in that market is a "cornerstone" of the subsidiary's long-term strategy, the company said.
The deal is expected to close in the second quarter.
Lohmann Animal Health had sales of $342 million in fiscal 2012. It has about 600 employees in more than 30 countries.
In November, Reuters reported that Boehringer Ingelheim was considering an offer for Lohmann Animal Health estimated at $535 million.
Lilly has been hit hard by patent losses in recent years and has said it expects both earnings and revenue to dip this year as it adjusts. The drugmaker recently lost patent protection for its top-selling product, the antidepressant Cymbalta.
The company, which also is known for a portfolio of diabetes treatments, has said it will depend on its animal health business to help make up for the loss of revenue.
Lilly now expects adjusted earnings for this year to range between $2.72 to $2.80 per share due to accounting adjustments and costs tied to the deal. That's down from its previous forecast for between $2.77 and $2.85 per share.
Analysts had expected earnings of $2.83 per share, according to FactSet.
Lilly shares climbed more than 1 percent, or 66 cents, to $58.62 each early Monday morning, slightly outpacing the Standard & Poor's 500 index. The shares reached $58.88 earlier in the session, their highest price in more than six years.