ntegra LifeSciences Holdings announced it has entered into a definitive agreement to acquire ACell for an upfront cash payment of $300M at closing, subject to customary purchase price adjustments, and cash payments of up to an additional $100M upon the achievement of certain revenue growth milestones. ACell is an innovative regenerative medicine company with a product portfolio based on a proprietary porcine urinary bladder matrix platform technology, MatriStem UBM. The transaction is expected to close in the first quarter of 2021, subject to the satisfaction of customary conditions, including regulatory approvals. The acquisition of ACell is the next step in the expansion of Integra’s Orthopedics and Tissue Technologies segment. Following the completion of the previously announced sale of Integra’s orthopedics business, which is expected to occur in early January, OTT will be referred to as the “Tissue Technologies” segment. ACell’s MatriStem UBM technology is designed to enhance the body’s ability to restore natural tissue and minimize scarring. It allows for a wide range of characteristics to be incorporated into devices for specific challenges in wound repair, ranging from strong suturable sheet materials designed for abdominal wall surgery to fine granular materials that conform to complex wound surfaces. Products include MicroMatrix, a particulate formulation, as well as Cytal Wound Matrix and Gentrix Surgical Matrix, both sheet formulations for the management of acute and chronic wounds and reinforcement of soft tissue in certain surgical applications. In 2019, ACell generated revenues of $100.8M, representing 13.0% growth over 2018. Integra expects the financial effects of this transaction to be accretive to revenue growth and adjusted gross margins. The impact to adjusted EBITDA margin and adjusted EPS is expected to be neutral in year one and accretive in year two. The transaction is expected to exceed the Company’s cost of capital by year three.

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