12th Mar 2019 13:31
LONDON (Alliance News) - Medical technology company Smith & Nephew PLC on Tuesday said its has agreed to acquire the US's Osiris Therapeutics Inc for USD660 million in cash.
The price represents USD19.00 per share for Nasdaq-listed Osiris. The stock closed on Monday in New York at USD18.88. The stock is up 24% in the past month and 40% in the year to date.
Columbia, Maryland-based Osiris is a regenerative medicine firm that produces products such as skin, bone graft, and articular cartilage substitutes.
Smith & Nephew will fund the deal through its existing cash and debt facilities, with the acquisition expected to be accretive to adjusted earnings per share from 2020. It is also expected to produce a return on invested capital in the third year after the deal closes, S&N said.
Osiris' revenue for the nine months to September 30 was USD102 million, up 19% from a year before. Osiris is due to publish its fourth quarter and 2018 results on Friday.
The majority of this revenue came from Osiris's Grafix skin substitute made from cryopreserved placental membrane and its cryopreserved placental tissue product, Stravix, that supports the repair of soft tissue. The UK's skin substitute market is worth USD900 milllion a year, growing at 7% annually, Smith & Nephew noted.
Simon Fraser, president of Advanced Wound Management at Smith & Nephew said: "Grafix offers a compelling new option for managing hard to heal wounds and Stravix expands our tissue repair portfolio. We will drive synergies across products from common call points and increased access to our wider customer base."
Smith & Nephew Chief Executive Namal Nawana said: "Greater presence in the fast growing regenerative medicine market enhances our portfolio and will help immediately accelerate our wound management business as well as provide longer term innovations in additional channels and indications."
Shares in Smith & Nephew were up 1.0% at 1,478.00p on Tuesday.
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