Shares of skin graft maker LifeCell Corp. surged to an all-time high Monday, after it agreed to a $1.7 billion cash takeover by medical technology company Kinetic Concepts Inc.
The $51-per-share purchase price represents an 18 percent premium to LifeCell's $43.15 closing stock price on Friday. In Monday trading, shares of the Branchburg, N.J.-based company jumped 16.9 percent, or $7.31, to $50.46, having earlier reached a new high of $50.55.
Kinetic Concepts makes hospital beds, specialized mattresses, and pressure relief systems to minimize patients' pressure sores and buildup of fluid in the lungs. The company also makes vacuum-based wound care systems which rotate immobilized patients to reduce lung complications.
LifeCell's products include tissue graft AlloDerm, which is used in reconstructive plastic, dental, and burn surgeries and Cymetra, an injectable form of the graft.
Roth Capital Partners LLC analyst Matt Dolan noted that LifeCell had been pursuing an international distribution partner, and thinks the two companies together represent a sound strategic fit.
Dolan said Kinetic's vacuum-based negative pressure wound therapy device is often used in complex hernia repair, which also happens to be AlloDerm's most significant use.
"We expect this deal to allow cross-selling opportunities for KCI to sell its vacuum-based wound care system with LifeCell's regenerative tissue matrices (AlloDerm & Strattice) and vice versa, both in the U.S. and abroad," Dolan wrote in a note to clients. "Combined with KCI's strong direct international (particularly European) sales presence, we believe KCI will be able to effective bring Strattice to the European market and target the appropriate clinical base."
Shares of San Antonio, Texas-based Kinetic Concepts rose $2.55, or 5.4 percent, to $49.57.
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