Coloplast Agrees to Buy Biotechnology Firm Kerecis for Up to $1.3 Billion

By Dominic Chopping

Danish medical device manufacturer Coloplast said Friday it has agreed to buy wound-care provider Kerecis for up to $1.3 billion.

Kerecis is a biotechnology company that has developed a technology using fish skin to treat wounds, burns and other complex wounds relating to diabetes, veins, trauma, and surgery.

Based in Iceland, it uses skin from fish caught in its local waters and has around 500 employees globally, of which more than two-thirds are in the U.S.

The company will pay $1.2 billion upfront in cash with an earnout potential of up to $100 million and is expected to be financed through an equity capital raise of around 9 billion Danish kroner ($1.32 billion).

The Danish company said the acquisition is expected to accelerate its group organic growth by around one percentage point as of full-year 2024/25 but will be margin dilutive in the short-term.

As a result of the acquisition, Coloplast said it has raised its long-term organic growth guidance to 8%-10%, from 7%-9%, and maintained its long-term earnings before interest and tax margin guidance at more than 30%. However, the EBIT margin in its 2025 strategy is now expected to remain below 30%, having targeted a margin of over 30%.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

July 07, 2023 03:46 ET (07:46 GMT)

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