Danish medical device manufacturer, Coloplast, has announced its agreement to purchase wound-care provider, Kerecis, for a sum of up to $1.3 billion. The deal is set to bolster Coloplast’s position in the medical device industry.
Kerecis, a biotechnology company based in Iceland, has developed an innovative technology that utilizes fish skin to effectively treat wounds, burns, and various other complex wound conditions associated with diabetes, veins, trauma, and surgery. By using locally caught fish, the company ensures a sustainable source of the needed raw material. With over 500 employees worldwide, a majority of which are situated in the United States, Kerecis has established its presence as a leading player in the wound-care sector.
As part of the agreement, Coloplast will make an initial cash payment of $1.2 billion, with an additional earnout potential of up to $100 million. The acquisition is expected to be funded through an equity capital raise amounting to approximately 9 billion Danish kroner ($1.32 billion).
While the purchase of Kerecis is projected to enhance Coloplast’s organic growth by approximately one percentage point starting from the 2024/25 fiscal year, it is important to note that this may result in a slight dilution in margins in the short-term. However, in light of this acquisition, Coloplast has revised and raised its long-term organic growth guidance to a range of 8%-10%, up from the previous guidance of 7%-9%. Additionally, the company has maintained its long-term earnings before interest and tax (EBIT) margin guidance at over 30%. It should be noted that the EBIT margin in Coloplast’s 2025 strategy is now expected to be below 30% instead of surpassing this threshold as initially planned.
The acquisition of Kerecis solidifies Coloplast’s commitment to expanding its presence in the medical device industry and strengthens its portfolio of advanced wound-care solutions. Overall, this strategic move is poised to drive sustainable growth for the company in the years to come.