Kensey Nash Is To Be Acquired by Life And Materials Science Company DSM

In short

Kensey Nash Corporation has announced that it has entered into a definitive agreement with Dutch based company Royal DSM, under which DSM has agreed to acquire all of the common stock of Kensey Nash through a cash tender offer, followed by a merger with a subsidiary of DSM, for $38.50 per share in cash, which represents a significant 33% premium over the prevailing share price.

Background

Under the terms of the merger agreement, DSM will in May commence an all-cash tender offer to acquire all of the outstanding shares of common stock of Kensey Nash for $38.50 per share. The tender offer is currently expected to be completed by the end of June 2012. The tender offer is subject to customary conditions, including the tender of a majority of the outstanding shares of Kensey Nash common stock on a fully diluted basis, and the expiration or termination of the Hart-Scott-Rodino Antitrust Improvements Act waiting period. Following the completion of the tender offer, DSM will acquire the remaining outstanding shares of Kensey Nash common stock through a second step merger, subject to customary conditions.

Kensey Nash’s Board of Directors has unanimously approved the tender offer and resolved to recommend that Kensey Nash stockholders tender their shares to DSM in the tender offer.

So why would DSM buy Kensey Nash?

Kensey Nash has strong relationships with an attractive US customer base, which will provide the opportunity to leverage DSM Biomedical’s current portfolio. In addition, DSM’s customer base in Europe and Asia will offer attractive growth opportunities for Kensey Nash’s product portfolio.

According to a DSM press release, its purchase of Kensey Nash will strengthen and complement DSM Biomedical’s business and capabilities, while clearly meeting DSM’s financial and strategic criteria. DSM Biomedical is one of three Emerging Business Areas of DSM. The company has an aspiration to realise €1 billion in sales by 2020 in its combined Emerging Business Areas and this acquisition puts it well on track to do its bit.

Company comments

For Kensey Nash

“We are very pleased to have entered into the merger agreement with DSM, as the transaction will deliver significant value to our stockholders. The price to be paid to our stockholders represents a premium of 33% over our closing price on May 2, 2012,” said Joe Kaufmann, President and Chief Executive Officer. “When completed, the transaction will also be a great event for our strategic partners, customers and employees. DSM is a global Life Sciences and Materials Sciences company with sales around euro 9 billion and 22,000 employees worldwide. Their presence in biomedical materials markets comes from a unique convergence between their expertise in Life Sciences and Materials Sciences. Our employees will benefit from the growth and expansion that DSM envisions will occur from this combination of capabilities and resources,” Mr. Kaufmann added.

Walter Maupay, Jr., Chairman of the Board said, “The Board of Directors unanimously concluded that this transaction is in the best interests of Kensey Nash and its stockholders. We believe this is a very positive outcome for our stockholders and maximizes the value of Kensey Nash’s regenerative medicine platforms.”

For DSM

“As life expectancy continues to increase and people want to remain physically active, growth in the biomedical materials market is expected to remain high. Biomedical is one of the key areas where DSM is able to fully leverage its unique science-based expertise in life sciences and materials sciences,” DSM chairman & CEO Feike Sijbesma said in prepared remarsk.

“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.”

Source: Kensey Nash Corporation, PR Newswire, Royal DSM BV