Integra LifeSciences has agreed to acquire Derma Sciences for approximately $204 million, the companies said today, in a deal that the buyer said would expand its wound care offerings and regenerative technology capabilities.
Integra said the transaction will accelerate its advanced wound care strategy through the addition of the amniotic tissue-based products of Derma Sciences, a tissue regeneration company focused on advanced wound and burn care.
“Derma Sciences’ amniotic tissue-based platform technology further broadens Integra’s regenerative technology capabilities and builds upon our 3x3 wound care strategy,” Peter Arduini, Integra’s president and CEO, said in a statement.
“3x3” is the name Integra has given to its focus on three product families—engineered collagen matrix, acellular dermal matrix, and human amniotic tissue—offered through three channels: inpatient, outpatient, and enterprise.
“The addition of a complementary portfolio of wound care products, including an amniotic product with reimbursement in the wound care channel, allows us to further drive scale in the advanced wound care market,” Arduini added.
Integra said it expects to use its existing credit facility to finance the transaction, in which it will commence a tender offer of $7 per share of Derma Sciences common stock—a 40% premium to the share price as of yesterday’s market close and a 45% premium to the 30-day volume-weighted average share price of $4.83. Integra will also offer to buy outstanding shares of Series A convertible preferred stock at $32 a share and of its Series B convertible preferred stock for $48 per share.
The tender offer will be followed by a merger of Derma Sciences with a newly formed subsidiary of Integra, the companies said, adding that their boards have both approved the deal.
Integra and Derma Sciences expect to complete their deal at the end of the first quarter, subject to customary closing conditions, including U.S. antitrust clearance and the tender of a majority of outstanding shares of Derma Sciences common stock and preferred stock.
Integra’s announcement of the deal included projections of the company’s fourth-quarter and full-year 2016 results. For the fourth quarter, Integra said it expects total revenue to be approximately $256 million, resulting in full-year 2016 revenue of approximately $992 million—the low end of the company’s range of guidance to investors.
Integra added that it expects to report fourth-quarter 2016 “organic” revenue growth—excluding the impact of foreign currency changes and revenue from discontinued and acquired products—of approximately 7%, and full-year 2016 organic growth of approximately 9%.
For 2017, Integra said, revenues are expected to range from approximately $1.05 billion to $1.07 billion.