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Kinetic Concepts to acquire LifeCell to enhance biosurgery growth

Kinetic Concepts : 08 April, 2008  (Company News)
Kinetic Concepts and LifeCell have signed a definitive agreement whereby KCI will acquire LifeCell.
The deal will be for $51.00 per share, or $1.7 billion in cash.

Following the completion of the transaction, LifeCell will operate as a new global biosurgery division within KCI. Paul Thomas will continue to lead the business as President of the division and will join KCI’s Executive Committee. LifeCell’s management team and corporate headquarters will continue to be located in Branchburg, New Jersey, USA. Based on existing KCI and LifeCell operations, the combined companies are expected to generate revenue of approximately $2 billion in 2008 and will employ more than 7,000 people.

“This is an exciting day for KCI,” said Catherine Burzik, president and chief executive officer of KCI. “LifeCell is an exceptional strategic fit for us. The acquisition of LifeCell provides additional long-term growth opportunities, benefiting patients and physicians and delivering sustained value to our shareholders. The acquisition brings together two respected market leaders with well-established best-in-class technologies. This combination allows us to accelerate our strategy to increase KCI’s presence in the operating room and will leverage our broad global market reach to drive future growth of LifeCell’s products. The focus of the integrated management team will be to bring to market unparalleled therapeutic solutions for patients. I am confident that the combined company will be a powerful force in delivering advanced therapies for complex clinical situations. We admire the achievements of Paul Thomas and his management team and look forward to welcoming LifeCell’s world-class sales force and product development organizations to KCI where they will play a crucial role in our future success.”

“Our board of directors and management team believe this transaction makes strategic sense for our company, offers a premium to our stockholders and creates exciting opportunities for our employees,” said Paul Thomas, chairman of the board, president and chief executive officer of LifeCell. “We expect that the combination of our leadership position in regenerative medicine and KCI’s innovative therapeutic approach to wound healing will present opportunities for both organizations to expand the markets we serve. KCI’s global infrastructure will accelerate the penetration of LifeCell products into international markets. We also believe KCI’s experience and leadership position in advanced wound care will facilitate the adoption of LifeCell’s innovative products into this market. Together, we look forward to improving the lives of more patients around the world.”

KCI will utilise its infrastructure together with LifeCell’s products to create a global medical technology leader with extensive experience developing and commercialising best-in-class technologies and clinically-proven products that achieve superior patient outcomes.

LifeCell’s best-selling product AlloDerm, used to repair damaged tissue in hernias and breast reconstruction, generated $167 million in revenue for the company last year. LifeCell is a leader in the rapidly growing biologics market.

The addition of LifeCell expands KCI’s offerings in the biosurgery and surgical suite and provides access to new commercial and therapeutic opportunities. By capitalising on LifeCell’s strong relationships with acute care operating physicians, KCI will have a platform upon which to launch its next generation negative pressure-based products for the surgery suite. Additionally, KCI plans to make use of its broad reach and global competencies in market development, regulatory and reimbursement functions to accelerate the global introduction of LifeCell’s products.

LifeCell’s newest product, Strattice, is the next generation of regenerative products and has the potential to transform the tissue regeneration industry. Easier to use, non-refrigerated, and available in large sizes, Strattice will provide the company’s biosurgery business opportunities for growth in other therapeutic areas and international markets. Strattice received 510(k) FDA clearance in June 2007 and is commercially available in the USA.
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