Coloplast to pay $1.2B upfront to buy fish skin wound care business Kerecis

Dive Brief:

Danish medical device maker Coloplast has agreed to buy Iceland-based wound care company Kerecis for $1.2 billion upfront, giving it control of a business that is expected to grow sales by 50% this year, the companies announced Friday.
Kerecis sells a wound care product based on fish skin. Launched in 2016, the product drove sales at Kerecis to 510 million Danish kroner ($74.5 million) last year, and more growth is forecast for this year.
Coloplast, which will run Kerecis as a standalone business unit, increased its long-term organic growth guidance by one percentage point, bumping the target up to the 8% to 10% range.

Dive Insight:

Coloplast is already a player in the wound care segment. With a portfolio that features the Biatain foam dressing, the Danish medtech company grew wound care sales by 12% in its second quarter. Backorders limited growth in the quarter, but having resolved the situation, Coloplast is ramping up to full capacity and looking to build momentum in France, Germany and the U.K.

Against that backdrop, Coloplast has identified Kerecis as a company that can further its wound care growth strategy. Iceland-based Kerecis sells intact fish skin for tissue regeneration. The device competes with transplant products based on tissues from humans and pigs.

Because no known viral transfer risk exists between North Atlantic cod and humans, Kerecis’ fish skin can undergo lighter processing than human and porcine products without exposing patients to the risk of infection. The product is similar to human skin and improves wound healing, according to Kerecis.

“So far, the products have successfully healed tens of thousands of severe wounds, primarily in the U.S. Kerecis is today the fastest growing company in the biologics care segment and it is, we believe, an emerging category leader, therefore well positioned to continue to outgrow the market. I look forward to building a truly global wound care franchise,” Coloplast CEO Kristian Villumsen said in a video announcing the acquisition.

Coloplast is paying $1.2 billion upfront to buy Kerecis. The total value of the deal is $1.3 billion.

Most (77%) of Kerecis’ shareholders have agreed to sell their holdings. Coloplast needs to achieve a 90% acceptance threshold and secure regulatory approvals to close the transaction. The company expects to close the deal by the fourth quarter of its current fiscal year.