The agreement has a total value reaching up to $1.3 billion. Of that, Coloplast intends to pay $1.2 billion in an upfront cash payment.
Denmark-based Coloplast sees Kerecis as an “attractive opportunity” to strengthen its presence in the advanced wound care market, according to a news release. The purchase would allow the company to enter the high-growth, U.S.-centric biologics segment.
Kerecis developed and patented a clinically differentiated, sustainable and scalable technology platform based on intact fish skin. It retains its similarity to human skin while production requires minimal processing. Coloplast said this results in improved wound healing. Since launching its product in 2016, Kerecis has grown quickly in the market, bringing in $74.7 million in revenue last year.
Coloplast expects Kerecis to bring an attractive gross margin level, accretive to its own gross margin. The company also expects revenue growth around 50% in fiscal 2022/23. As a result of the acquisition, it raised its long-term organic growth guidance from 7%-9% to 8%-10%.
Following the expected acquisition, Coloplast plans for Kerecis to operate as a standalone business unit under its own identity and brand. Integration focuses around business support and other areas to support Kerecis’ growth outlook and continued expansion.
Coloplast plans to fund the transaction — expected to close in the fourth quarter — through an equity capital raise. As of today, 77% of Kerecis’ shareholders committed to sell their shares to Coloplast. The transaction’s closing requires customary regulatory approvals and an acceptance threshold of at least 90%.
