Dutch life sciences firm Royal DSM NV (RDSMY.PK) has agreed to acquire medical device maker Kensey Nash Corp. (KNSY: Quote), paying a 33 percent premium to the U.S. firm's last traded price per share. DSM said Thursday it will pay $38.50 in cash per share, giving Kensey Nash an enterprise value of around $360 million.
Through the acquisition, DSM intends to strengthen its biomedical business, and anticipates the deal to be accretive to its earnings from 2013 onwards. The transaction has been unanimously approved by both DSM's supervisory board and Kensey Nash's board of directors.
As per the terms of the deal, the acquisition will be made through a cash tender offer, followed by a merger with a unit of DSM. The tender offer is expected to begin in May.
The agreed price represents a premium of 33 percent to Kensey Nash's closing share price of $29.01 on May 2, 2012. The transaction may be complete around the end of second quarter of 2012.
Pennsylvania-headquartered Kensey Nash makes medical devices for use in cardiology, orthopedic, sports medicine, spinal and general surgery. The company employs about 325 people. For its fiscal year ending June 30, 2012, Kensey Nash expects net sales of around $90 million, with an increase to about $100 million in fiscal 2013.
The transaction is not subject to a financing condition, and DSM plans to finance the acquisition from existing cash.
Feike Sijbesma, CEO and chairman of the DSM Managing Board said, "With this acquisition, we are putting DSM Biomedical clearly on the map as the second new growth platform for DSM in addition to our Bio-based Products & Services business as we continue to create value for all stakeholders by providing innovative, sustainable solutions to the world's greatest challenges."
Separately, Kensey Nash reported a third-quarter net income of $2.95 million or $0.34 per share, compared to net loss of $8.05 million or $0.94 per share last year.
Total revenues for the quarter grew 19 percent to $22.16 million from $18.59 million in the prior year. Royalty income declined 6 percent to $6.1 million.
On average, four analysts polled by Thomson Reuters expected the company to earn $0.35 per share on revenues of $22 million for the quarter. Analysts' estimates typically exclude special items.
In Amsterdam, DSM shares are currently trading at 44.51 euros, up 1.54 percent. Kensey Nash ended on Wednesday at $29.01 on the Nasdaq.
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by RTT Staff Writer
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