DSM swoops in with $360M offer for Kensey Nash

Dutch company Royal DSM ($DSM) has agreed to cough up $360 million in cash for Exton, PA-based Kensey Nash ($KNSY), a player in regenerative medicine. The deal is expected to close around the end of the second quarter, and executives aren't anticipating any antitrust issues.

The two companies began discussing R&D collaborations early last year, and the two began looking toward M&A last summer, DSM executives said during a call on the acquisition.

Kensey Nash's products are sold through partners in cardiology, orthopedic, sports medicine, spine, trauma, craniomaxillofacial and general surgery markets.

With the buy, DSM is aiming to build its biomedical business, one of the company's three emerging business areas. DSM aspires to realize €1 billion ($1.3 billion) in sales by 2020 in its combined emerging business areas, and the company notes that the Kensey Nash acquisition puts it on track to meet this goal. 

The acquisition is DSM's second major purchase in under two years, but CEO Feike Sijbesma said during the call that it doesn't fulfill all of the company's M&A ambitions. Sijbesma is trying to focus the company on value-added propositions that are less vulnerable to economic swings, Bloomberg notes, and he views the Kensey Nash pickup as very positive. Indeed, the buy puts "DSM Biomedical clearly on the map," Sijbesma said.

He added that Kensey Nash has an attractive customer base. Indeed, its main customers include device leaders Stryker ($SYK) and St. Jude Medical ($STJ).

Kensey Nash executives also seem enthusiastic about the deal's prospects. "The board of directors unanimously concluded that this transaction is in the best interests of Kensey Nash and its stockholders," explained Chairman Walter Maupay Jr. "We believe this is a very positive outcome for our stockholders and maximizes the value of Kensey Nash's regenerative medicine platforms."

Separately, Kensey Nash reported its third-quarter financial results, with revenue of $22.2 million, a 19% increase from $18.6 million a year earlier. It also saw net sales of $16.1 million, a 33% increase from $12.1 million a year earlier.

(Signing ceremony photo courtesy of DSM)

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