Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Comvita expects to realise $30M from sale of Medihoney

Thursday 12 January 2017 11:31 AM

Comvita expects to realise $30M from sale of Medihoney, shares in US partner

By Sophie Boot

Jan. 12 (BusinessDesk) - Comvita, the manuka honey products company, has sold its Medihoney brand to US partner Derma Sciences for about $19 million, and will reap a further $11 million selling Derma shares in a takeover offer of the Nasdaq-listed company.

The gross proceeds of the Medihoney deal will amount to US$13.25 million, with a US$5 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 Jan. 10 that it will be acquired by Nasdaq-listed Integra LifeSciences for US$7 per share by the end of March. That values 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 expects to post a loss for its first half, ended Dec. 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, entirely produced in the second half. In August 2016, Comvita posted a 15-month profit of $18.5 million 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 2.3 million new shares to Derma at $3.90 apiece, a 3.7 percent discount at the time, giving Derma a 7.3 percent 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 percent of the company at $12.06 per share.

Comvita shares last traded at $8, up 0.9 percent today. They have declined 7.6 percent 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 US$6.95, up 33 percent this year having disclosed their acquisition by Integra.

(BusinessDesk)

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Primary Sector Council Report: Vision To Unite The Primary Sector Launched

Agriculture Minister Damien O’Connor has welcomed the release of a bold new vision for the country’s vital food and fibre sector. More>>

ALSO:

Crown Accounts: Treasury HYEFU Sees Deficit Then Rising Surpluses

An operating balance before gains and losses deficit of $0.9 billion is forecast in the current year, before returning to a small surplus in 2020/21 which then grows to reach $5.9 billion (1.5% of GDP) in 2023/24. More>>

ALSO:

Fuels Rushing In: Govt "Ready To Act" On Petrol Market Report

The Government will now take the Commerce Commission’s recommendations to Cabinet...
• A more transparent wholesale pricing regime • Greater contractual freedoms and fairer terms • Introducing an enforceable industry code of conduct • Improve transparency of premium grade fuel pricing... More>>

ALSO:

Reserve Bank Capital Review Decision: Increased Bank Capital Requirements

Governor Adrian Orr said the decisions to increase capital requirements are about making the banking system safer for all New Zealanders, and will ensure bank owners have a meaningful stake in their businesses. More>>

ALSO: