The gross proceeds of the Medihoney deal will amount to $US13.25 million, with a $US5 million earnout payable on sales milestones being achieved, Comvita said in a statement to the NZX. Comvita also owns 1.1 million shares in Derma Sciences, which announced on January 10 that it would be acquired by Nasdaq-listed Integra LifeSciences for $US7 per share by the end of March. That valued Comvita’s stake at about $11 million, it said.
Derma Sciences already held the exclusive global rights to Medihoney wound-care products, and in 2016 paid $2.1 million to Comvita in royalties for the use of the brand and trademarks. Those royalties will stop when the sale is completed.
Comvita will retain the use of the brand to develop its over-the-counter business, particularly for products to treat eczema, while Derma Sciences will hold the regulatory approvals to make products to European and US medical device quality standards. The deal also includes a 10-year honey supply agreement between the two.
The Te Puke-based company told shareholders in October that it expected to post a loss for its first half, ended December 31, after tough trading and significantly lower sales in the first quarter due to the impact of regulatory changes in China.
It expects a full-year profit of $17.1 million, produced entirely in the second half. In August 2016, Comvita posted a 15-month profit of $18.5million after changing its balance date. Comvita previously reported a profit of $17.2 million in the 12 months ended March 31, 2016.
In 2013, Comvita raised about $9 million selling about 2.3million new shares to Derma at $3.90 apiece, a 3.7% discount at the time, giving Derma a 7.3% stake, while its chief executive, Edward Quilty, joined the Comvita board. Derma ceased to have a substantial shareholding in Comvita in May 2016, selling down to 4.7% of the company at $12.06 per share.
Comvita shares last traded at $8, up 0.9% yesterday. They have declined 7.6% in the past year, having peaked at a record $12.85 in May 2016, after the company joined the NZX50 Index in April, but falling back over the remainder of the year. Derma shares last traded at $US6.95, up 33% this year after disclosure of the acquisition by Integra.
