Integra LifeSciences closes $200m Derma Sciences buy

Integra LifeSciences (NSDQ:IART) said today that it closed its $205 million buy of Derma Sciences (NSDQ:DSCI) and its line of wound care products.

The $7-per-share deal included a line of regenerative allograft products derived from human placental tissue that Derma Sciences acquired when it paid nearly $80 million for BioD last year. Integra also agreed to pay $32 per share Series A preferred stock and $48 per share for Series B preferred stock, according to a regulatory filing. The deal was funded using cash on hand, Integra said.

The same day that its own acquisition was announced, Derma Sciences said it paid $13.3 million for Medihoney, having owned the exclusive global license for the Comvita-owned brand; the acquisition included a 10-year supply deal for medical honey from Comvita.

Integra has said it expects the Derma Sciences business to add about $65 million to the top line this year. Adjusted earnings per share are expected to take a -3¢ hit in 2017, but the new unit is forecast to boost earnings in 2018 and meet Integra’s return-on-invested-capital benchmark the year after.

Last week Integra floated a $1.05 billion cash offer for Johnson & Johnson (NYSE:JNJ) unit Codman Neurosurgery, excluding Codman’s neurovascular and drug-delivery businesses. The deal includes a $60 million kill fee and is expected to close in about 24 principal international jurisdictions during the 4th quarter and in the remaining nations on a rolling basis after that.

Earlier this month Integra eked out some Wall Street-beating numbers for the 4th quarter and raised its outlook for 2016. The Plainsboro, N.J.-based company posted profits of $15.0 million, or 39¢ per share, on sales of $241.2 million for the 3 months ended Dec. 31, 2o15, marking a -12.7% profit slide on sales growth of 10.1% compared with Q4 2014.

Adjusted to exclude 1-time items, earnings per share were 87¢, a penny ahead of the consensus on The Street, where analysts were looking for sales of $241.1 million.

Integra swung to a loss for the full year at -3.5 million, or -10¢ per share, on sales growth of 10.8% to $882.7 million compared with 2014. Adjusted EPS came in at $3.08, 3¢ under consensus. Analysts were looking for 2015 sales of $888.7 million.

 

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