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Biotech Derma Sciences (DSCI) saw its share price soar 39% Wednesday midday after the company announced it would be acquired by Integra LifeSciences (IART) - Get Integra LifeSciences Holdings Corporation Report for $204 million.

Derma's shares jumped $1.95 apiece, hitting $6.95 around noon Wednesday. Meanwhile, Integra saw shares fall 3.7%, hitting $43.24 apiece.

According to the terms of the deal, Integra will pay $7.00 per share of common stock in cash, or a total of approximately $204 million. It will also pay $32 per share in cash for Derma's Series A convertible preferred stock and $48.00 per share for its Series B convertible preferred stock. The deal is expected to close in the first quarter of 2017.

The purchase price for the common shares reflects a 40% premium to the share price as of the market close on January 10, 2017 and a 45% premium to the 30-day volume-weighted average share price of $4.83. Integra will also assume the contingent liabilities related to the BioD transaction, including the product regulatory milestone payment and both the 2017 and 2018 growth earn-out payments. The transaction, which has been approved by the boards of directors of both companies, is expected to close in the first quarter of 2017.

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"Both Integra and Derma have a significant commitment to tissue regeneration, wound care and patient care," Stephen Wills, executive chairman at Derma. "Derma's portfolio of biologics and advanced wound care products are a natural extension of Integra's business, and with Integra's global presence, our products will reach a much larger and broader set of clinicians and patients."

Derma engaged Greenhill & Co. LLC as financial adviser and Thompson Hine LLP as legal adviser. Meanwhile, BofA Merrill Lynch served as financial adviser to Integra, while Latham & Watkins LLP served as legal counsel to the company.

Neither company could be reached for immediate comment Wednesday.