Integra LifeSciences Acquires Derma Sciences for $204 Million to Expand Advanced Wound Care Portfolio

Today, Integra LifeSciences announced that it has signed a contract worth approximately $204 million with Derma. The buyer, Integra, stated that this transaction will expand the company’s wound care services and enhance its tissue regeneration technology capabilities.

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Integra stated that Derma Sciences, a wound care company, possesses highly advanced technology. Following this transaction, Integra can leverage its amniotic membrane-based wound repair products to expand its business in this area.

“Derma’s amniotic tissue repair technology can further expand the diversity of our company’s wound repair product portfolio, contributing to our 3x3 strategic products,” said Peter Arduini, CEO and Chairman of Integra, in a statement.

His so-called “3x3” refers to the following: The first “3” denotes the three primary product families that Integra LifeSciences focuses on—collagen matrices, acellular dermal matrices, and human amniotic tissue; the second “3” indicates that these products reach customers through three channels—outpatient departments, inpatient departments, and other enterprises.

“Currently, Derma can supplement our portfolio with a wide range of high-quality wound care product lines, including an amniotic membrane repair product eligible for reimbursement through medical insurance channels, thereby helping Integra expand its market share in post-operative and burn care,” Arduini added.

Integra stated that it would use its existing credit facility to complete the transaction, acquiring Derma Sciences’ common shares at an offer price of $7 per share, representing a premium over its previous day’s closing price.Up to 40%, representing an even higher premium compared to the daily weighted average price of $4.83 per share over the previous 30 trading daysUp to 45%In addition, Integra will purchase its Series A convertible preferred stock at $32 per share and its Series B convertible preferred stock at $48 per share. The boards of directors of both parties have also agreed that, upon completion of the acquisition, Derma Sciences will merge with a newly established subsidiary of Integra.

Under the customary closing conditions, Integra and Derma Sciences will complete the transaction by the end of the first quarter of 2017, including obtaining antitrust approvals and completing the tender offer for a majority of Derma’s outstanding common and preferred shares.

In its announcement regarding the transaction, Integra included estimates for its fourth-quarter and full-year 2016 financial performance. The company reported that total revenue for the fourth quarter of 2016 was approximately $256 million, while full-year revenue amounted to roughly $992 million. Following the acquisition completed earlier this year, Integra projects that revenue growth for the new year will range between 7% and 8.5%, bringing total revenue to between $1.05 billion and $1.07 billion.

Derma Sciences is a company dedicated to advanced wound and tissue repair, utilizing placental tissue for wound healing. Its newly commercialized products are suitable for the treatment of various chronic wounds, acute wound healing, local injuries or inflammation, and for filling soft tissue defects or voids. Derma’s specific product portfolio includes: molding systems for diabetic foot ulcers, a product line based primarily on honey for trauma care, products for managing wound exudate, and antimicrobial wound care solutions. Additionally, Derma offers a comprehensive range of traditional formulation restorative care products.

Integra LifeSciences Holdings Corporation is a global leader in medical technology, dedicated to eliminating uncertainty in treatment for clinicians to enhance patient care. Integra offers a range of innovative solutions in reconstructive and restorative medicine, with expertise in surgical and orthopedic applications.