TIDMCTEC
RNS Number : 9627Z
ConvaTec Group PLC
28 January 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
28 January 2022
Entry into the attractive wound biologics segment through
the acquisition of Triad Life Sciences Inc
-- Strengthens ConvaTec's Advanced Wound Care business in the US
- highly complementary product portfolios and commercial
expertise
-- Secures access to innovative and differentiated technology and an exciting pipeline
-- Future growth supported by CTEC's expertise and global reach
-- Initial consideration of $125m with potential $50m for
short-term milestones. Additional earnout potential dependent on
financial performance in first two years. Return on invested
capital is expected to be greater than WACC in year 3
ConvaTec Group Plc (CTEC.LN), a global medical solutions company
focused on the management of chronic conditions, is pleased to
announce that it has entered into a definitive agreement to acquire
Triad Life Sciences Inc(1) ('Triad'), a US-focused medical device
company that develops biologically-derived innovative products to
address unmet clinical needs in surgical wounds, chronic wounds and
burns. The transaction, which is subject to regulatory approvals
and other customary conditions, is expected to close during Q1
2022.
For ConvaTec this represents an entry into the large and rapidly
growing wound biologics segment(2) . This segment is currently
estimated to be worth c.$1.8 billion per annum globally with a
projected growth of high single digit percentage per annum.
Regenerative medicine and biologically-derived therapies are
frequently used to treat hard-to-heal wounds which, in the US
alone, affect 3.7 million patients each year.
This proposed acquisition is consistent with ConvaTec's FISBE
strategy (Focus-Innovate-Simplify-Build-Execute). It strengthens
Convatec's Advanced Wound Care position in the US (Focus) and
secures access to a complementary and innovative technology
platform (Innovation) that enhances advanced wound management and
patient outcomes.
This t echnology, know-how and a pipeline of innovative products
based on porcine placental tissue offer attractive characteristics
in the treatment of hard-to-heal wounds. Triad's latest offerings,
InnovaMatrixAC and InnovaBurn, are the first 510k cleared porcine
placenta -- derived extracellular matrix products in the US(3) .
Sales of these products commenced in 2021. In addition, Triad has
an attractive pipeline of new products for advanced wound care and
also a technology platform with the potential to enter the
regenerative medicine segment.
Founded in 2017, Triad Life Sciences is based in Memphis,
Tennessee and currently has over 50 employees. The company
develops, manufactures and commercializes their product portfolio.
These products are highly complementary to ConvaTec's existing
portfolio and will enable the Group to meet a wider range of needs
of both patients and health care practitioners. This transaction
will also be commercially complementary. Triad will bring expertise
in this novel and rapidly growing segment, whilst benefitting from
ConvaTec's global commercial, quality & operations, and R&D
capabilities.
The initial consideration is $125 million with two potential
additional payments of $25 million each relating to short-term
milestones. There are also two earnout payments conditional on
performance during year 1 and year 2 post completion, with the
maximum earnout of $275 million based on stretching financial
performance over the period.
This is an exciting opportunity for ConvaTec, with powerful
strategic logic, a strong contribution to future growth and an
attractive financial profile. The transaction is expected to be
immediately accretive to sales growth and the return on invested
capital is expected to exceed the Group's cost of capital in year
three. The consideration will be satisfied from existing cash
balances and debt facilities.
Karim Bitar , CEO, ConvaTec Group said: "Today's announcement
marks another successful step in our strategic intent of pivoting
to sustainable and profitable growth. This transaction will
strengthen our Wound Care business and enable ConvaTec to enter the
rapidly growing wound biologics segment. Triad Life Sciences has
innovative and differentiated products and an exciting pipeline
which is consistent with our vision - Pioneering trusted medical
solutions to improve the lives we touch. We are delighted that Russ
and the team have decided to join ConvaTec."
Russell Olsen (4) , President and CEO, Triad Life Sciences Inc
said: "ConvaTec has an impressive reputation and unique
capabilities in Advanced Wound Care, based on decades of
innovation. We are excited to be joining ConvaTec and look forward
to accelerating the growth of our innovative technology
platform."
***
Analysts and Investors
Kate Postans, VP, Investor Relations & Corporate Communications +44 (0) 7826 447807
Media
Buchanan: Charles Ryland / Chris Lane / Vicky Hayns +44 (0)207 466 5000
Notes
(1) The vendor is Triad Life Sciences, Inc.
(2) SmartTRAK estimate for 'WorldWide Wound Biologics' revenues
(e.g. skin substitutes, active collagen dressings and topical drug
delivery) in 2021 with 5-year CAGR.
(3) The business, which is focused solely in the US, generated
annual revenues of $8.4 million in 2020 and a loss before tax of
$2.8 million. Revenues for 2021 are estimated to be approximately
$19 million. The gross assets of Triad Life Sciences were $23
million at 30 June 2021.
(4) Russell Olsen, the Founder and CEO of Triad Life Sciences,
will be the General Manager of the business, reporting directly
into David Shepherd, President and Chief Operating Officer of
Global Advanced Wound Care. Russ has over 35 years of experience in
the MedTech industry. He has held roles at Bristol-Myers Squibb and
Smith & Nephew and served as Global President for Derma
Sciences and Chief Executive Officer of BioD, LLC.
This acquisition constitutes a class 2 transaction for the
purposes of the UK Financial Conduct Authority's Listing Rules. The
person responsible for this announcement on behalf of ConvaTec
Group Plc is Susan Marsden, Deputy Company Secretary.
ConvaTec Group Plc
ConvaTec is a FTSE 250 global medical products and technologies
company focused on solutions for the management of chronic
conditions, with leading positions in advanced wound care, ostomy
care, continence and critical care, and infusion care. We have more
than 10,000 colleagues and operations in over 100 countries. Our
vision is pioneering trusted medical solutions to improve the lives
we touch. Our products provide a range of clinical and economic
benefits including infection prevention, protection of at-risk
skin, improved patient outcomes and reduced total cost of care.
Group revenues in 2020 were over $1.894 billion. To learn more
about ConvaTec, please visit http://www.convatecgroup.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
ACQPPUMPGUPPUQR
(END) Dow Jones Newswires
January 28, 2022 02:00 ET (07:00 GMT)
Grafico Azioni Convatec (LSE:CTEC)
Storico
Da Feb 2024 a Mar 2024
Grafico Azioni Convatec (LSE:CTEC)
Storico
Da Mar 2023 a Mar 2024