EXTON, Pa., May 24, 2011 /PRNewswire/ — Kensey Nash Corporation (NASDAQ: KNSY), today announced it has acquired the assets comprising the product lines of Synthes Inc.’s (SIX: SYST.VX) Norian subsidiary for $22 million in cash. Norian currently manufactures a portfolio of orthobiosurgery products which are exclusively distributed globally by Synthes. As part of a long-term supply agreement, Kensey Nash will manufacture the Norian products, and Synthes will exclusively distribute the products worldwide. In addition, the companies entered into a research and development agreement to create certain related future products. In the Company’s fiscal year ending June 30, 2012, the Company expects the transaction to add product sales of approximately $14 million and to result in diluted earnings per share accretion of approximately $0.15, which includes non-cash intangible amortization of approximately $0.08 per share and excludes the impact of any related step-up in inventory values required under acquisition accounting.
Kensey Nash will transition the Norian product manufacturing operations from Synthes’ current facility in West Chester, PA to the Kensey Nash Exton, PA facility over an 18-24 month period.
Kensey Nash made an initial payment of $11 million, financed with cash on hand at the closing, and will make an additional $11 million payment, also expected to be financed with cash on hand, at the earlier of either the transfer of manufacturing to the Kensey Nash facility or 18 months after the closing. Kensey Nash also acquired the 37,000 square foot building in which the Norian manufacturing is conducted for $4 million. Synthes has entered into a long-term lease to utilize the building after Kensey Nash transfers the manufacturing into its Exton facility.
The Norian portfolio consists of approximately a dozen biomaterial-based surgical products including: the beta-tricalcium phosphate chronOS Preforms and chronOS Strip; the SynPOR Porous Polyethylene Implants; and the Norian family of calcium phosphate bone cements, which include reinforced and fast setting products as part of the Norian Skeletal Repair System and Norian Craniofacial Repair System product lines. The addition of Norian’s orthobiosurgery and other key biomaterial products should allow Kensey Nash to further its penetration into the regenerative medicine markets encompassing soft tissue surgical repair, orthopaedics, sports medicine, spine and neurosurgery.
“This acquisition, along with the supply and research and development agreements with Synthes, will enable Kensey Nash to significantly expand our presence in the regenerative medicine market and should provide us with an immediate and long-term positive financial impact for our fiscal year 2012 and beyond in both revenues and earnings per share,” commented Joseph W. Kaufmann, President and CEO of Kensey Nash Corporation. “In addition, this transaction will further strengthen and fortify the successful and mutually beneficial partnership we currently have in place with Synthes,” he concluded.
“Synthes and Kensey Nash have a history of successfully collaborating on biomaterials products that improve patient care; this transaction will further strengthen our relationship,” commented Michel Orsinger, President and CEO of Synthes.