Coloplast to acquire biologics wound care innovator Kerecis

Coloplast, a Danish medical products company, has announced its plan to acquire Kerecis, a rapidly growing innovator in the biologics wound care market based in Iceland.

The deal is expected to reach a value of $1.3 billion (around DKK 8.9 billion), with an upfront cash payment of $ 1.2 billion (around DKK 8.2 billion).

Kerecis has pioneered a patented, clinically distinguished technology platform based on intact fish skin, aiming to improve wound care treatment. The fish skin, with minimal processing, retains similarities to human skin, enhancing wound healing. This technology, backed by various clinical trials, has been used to treat a considerable number of patients since its launch in 2016.

The acquisition of Kerecis will strategically boost Coloplast’s influence in the advanced wound care market by allowing it to enter the biologics segment, primarily centered in the US. Kerecis’ revenue, which broke even in FY 2021/22, has reached DKK 510 million, making it the fastest-growing company in the biologics wound care segment. The acquisition is expected to accelerate Coloplast’s organic growth, contributing approximately 1% as of FY 2024/25.

Fertram Sigurjonsson — Kerecis founder and CEO said: “Kerecis was founded with a purpose to extend the lives of patients with technologies that support the body’s own ability to heal. Our intact fish-skin technology, coupled with our digital platform, has allowed us to be true to our purpose. In just a few years, Kerecis has grown to become the fifth largest company in the US biologics wound care segment.

“The fish skin used in Kerecis’ products is derived from wild and sustainable fish stock, caught in the pristine Icelandic waters and processed using 100% green energy in the town of Isafjordur, close to the Arctic Circle. Kerecis and Coloplast possess similar values and are both on a mission to improve patients’ lives through an innovation-driven culture.”

Kerecis is projected to continue its robust growth trajectory with an estimated three-year CAGR of around 30% until FY 2025/26. In terms of EBIT margin assumptions, Kerecis’ EBIT margin is projected to be around 10% in FY 2022/23 and increase to approximately 20% in FY 2025/26. As a result of the acquisition, Coloplast has raised its long-term organic growth guidance to 8-10% from the previous 7-9%.

Kerecis will continue to operate as a stand-alone business unit under its own brand and identity following the expected acquisition, with integration focused on business support and other selected areas to support the company’s robust growth outlook and ongoing expansion.

Kristian Villumsen — Coloplast President and CEO said: “At Coloplast, we are committed to securing long-term growth drivers through organic and inorganic opportunities. The advanced wound care market holds significant untapped potential, and today Coloplast is only present in the advanced dressings segment and mostly outside of the US.

“Chronic, surgical, burn, and other hard-to-heal wounds are a major area of unmet clinical need and a growing social and economic challenge. With the acquisition of Kerecis we obtain a differentiated product offering and strong commercial US infrastructure, allowing us to expand into the fast-growing biologics wound care segment and at the same time expand our position in the US.”

The acquisition is set to be financed through an equity capital raise and is anticipated to close in Q4 2022/23, subject to regulatory approvals.