Integra LifeSciences (IART) to Acquire TEI Biosciences in $312M Deal

Integra LifeSciences (Nasdaq: IART), TEI Biosciences Inc., and TEI Medical Inc. announced a definitive agreement under which Integra will acquire all of the outstanding shares of TEI Biosciences, Inc. and TEI Medical, Inc. ("TEI") for $312 million cash at closing. The companies expect to complete this transaction during the third quarter of 2015, subject to customary closing conditions.

The acquisition of TEI complements and expands Integra's reconstructive surgery and regenerative wound care product offerings. In addition, it will enhance shareholder value through the following strategic benefits:

• Broadens Integra's position as a leader in regenerative wound care and tissue repair with the addition of the complementary technology platform PriMatrix® Dermal Repair Scaffold
• Expands our sales force to support market demand and drive growth in the OR, burn centers, and wound care clinics with the addition of about 125 sales reps and managers
• Offers regenerative technology-based products and new base of sales in attractive adjacent markets, specifically abdominal wall repair and plastic and reconstructive surgery
• Provides attractive operating margins, which will allow for investment to further develop the combined regenerative wound care technology platform and strengthen the commercial channel

Peter Arduini, Integra's President and Chief Executive Officer, stated, "This acquisition broadens our presence in regenerative wound care and tissue repair and represents a significant push forward toward our growth objectives for 2015 and beyond. The addition of TEI is an important, strategic next step for both our channel and international expansion priorities. We are enthusiastic about both TEI's product development and commercial expertise, which accelerates our ability to establish an immediate presence in the diabetic foot ulcer space."

Dr. Yiannis Monovoukas, PhD, Chairman, President and CEO of TEI, said, "It is an exciting time for TEI, and I am confident in Integra's ability to grow our leading platform technology to drive broader expansion into regenerative medicine including wound care, plastic and reconstructive surgery and other soft tissue repair and reconstruction applications."

TEI generated revenues of approximately $63.5 million (unaudited) in 2014. Gross margin was about 80%, which is comparable to Integra's regenerative technology product portfolio, and EBITDA margin was about 25%. Preliminarily, Integra expects the acquired revenue to increase high single digits in the first full year after closing. Integra will provide further guidance, including expectations for 2015 financial performance, when it reports second quarter financial results in late July.

"This transaction advances our strategy in wound care, meets our financial criteria, and generates high returns on our capital," said Glenn Coleman, Integra's CVP and Chief Financial Officer. "Upon closing, we expect this deal to be immediately accretive to our adjusted EBITDA and operating margins, and slightly accretive to our adjusted earnings per share, including the effects of any financing transactions that may close subsequent to the closing of the TEI acquisition."

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