Integra LifeSciences To Buy Derma Sciences For $7.00/shr In Cash

(RTTNews) - Integra LifeSciences Holdings Corp. (IART) announced that it has signed a definitive agreement to acquire Derma Sciences Inc. (DSCI) for a price of $7.00 per share of Derma Sciences common stock in cash.

As per the agreement, Integra will commence a tender offer to purchase all of the outstanding shares of Derma Sciences common stock for $7.00 per share in cash. Integra will also offer to purchase the outstanding shares of Derma Sciences preferred stock for an amount equal to its liquidation preference per share. The tender offer will be followed by a merger of Derma Sciences with a newly formed subsidiary of Integra.

Separately, Derma Sciences confirmed that it has signed a definitive agreement whereby Derma Sciences will be acquired by Integra LifeSciences Holdings Corporation (Nasdaq: IART) for $7.00 per share of common stock in cash, or a total of approximately $204 million, and $32.00 per share for its outstanding shares of Series A Convertible Preferred Stock and $48.00 per share for its Series B Convertible Preferred Stock, reflecting the stated value of such preferred stock in each case. The purchase price reflects a 40% premium to the share price as of the market close on January 10, 2017 and a 45% premium to the 30-day volume-weighted average share price of $4.83.

The companies expect to complete the transaction at the end of the first quarter of 2017, 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 expects to use its existing credit facility to finance the transaction.

Integra also announced that it expects its fourth quarter 2016 total revenue to be approximately $256 million, resulting in full-year 2016 revenue of approximately $992 million, at the low end of the previously provided guidance range. Integra expects to report fourth-quarter 2016 organic revenue growth, which excludes the impact of foreign currency changes and revenue from discontinued and acquired products, of approximately 7.0%, and full-year 2016 organic growth of approximately 9.0%.

Integra LifeSciences expects fourth-quarter 2016 GAAP and adjusted diluted earnings per share to be at or above the mid-point of the prior guidance range of $0.32 to $0.35 and $0.50 to $0.53 post-stock split, respectively. This implies full-year 2016 GAAP and adjusted earnings per share at or above the mid-point of the range of $0.91 to $0.94 and $1.73 to $1.77 post-stock split, respectively.

Integra LifeSciences also provided preliminary 2017 revenue and adjusted earnings per share guidance for 2017. Integra expects full-year 2017 organic revenue growth to be between 7% and 8.5%. This implies a revenue range of approximately $1.05 billion to $1.07 billion, inclusive of an unfavorable impact from foreign currency of approximately one percent at current exchange rates.

Full-year 2017 earnings per share are expected to grow low double digits, exclusive of the unfavorable impact expected from foreign currency. The Company expects full-year 2017 adjusted earnings per share to be in the range of $1.91 to $1.97, taking into account a two cent negative impact from foreign currency.

The company said it is still in the process of reconciling estimates for full-year 2017 GAAP EPS projections and will provide this information and other additional information when full 2016 financial results are reported on February 22, 2017.

Separately, Derma Sciences provided preliminary financial results for 2016. Its net sales for the fourth-quarter were $26.9 million, while annual net sales were $82.4 million.