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viewCollagen Solutions PLC

Collagen Solutions heads for private ownership following RDI deal

Snapshot

  • Regenerative medicines and biomaterials specialist
  • Lead product is surgically-placed scaffold ChondroMimetic
  • Has agreed £30.4mln takeover deal with US firm Rosen’s Diversified
picture of a knee

Quick facts: Collagen Solutions PLC

Price: 6.625 GBX

LSE:COS
Market: LSE
Market Cap: £30.99 m
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What the company does

Collagen Solutions PLC (LON:COS) specialises in regenerative medicines and biomaterials. It uses collagen and other tissue – such as pericardium – to make everything from heart valves to bone grafts right through to wound dressings: it all depends on what the customer wants.

Collagen has another string to its bow in the form of a lead product called ChondroMimetic. This is a minimally-invasive, surgically-placed scaffold which helps repair knee cartilage.

 

How it is doing

On August 27, Collagen announced that it had agreed a £30.4mln cash takeover from US agribusiness and food production company Rosen’s Diversified (RDI).

RDI, a US-based private company founded in 1946, is paying 6,5p per share, a 160% premium to the closing price of the company's shares on the day before the deal was announced.

Collagen put itself up for sale in April and the price represents a multiple of almost eight times revenues in the year to March.

RDI already owns an 18.7% stake in Collagen and has a strategic relationship in place with director Wade Rosen on the board.

Agreement for the offer has already been received from shareholders representing around 43% its shares taking acceptances to 61.49%.

At the end of July in an update on its current trading accompanying its  results for the year ended March 31, 2020, the company  its year-to-date sales plus its confirmed order book are now over £4mln following the signing of two supply agreements in its first quarter.

For the prior year, Collagen reported revenues of £4.46mln, down 1% year-on-year, alongside a pre-tax loss of £2.06mln compared to £1.79mln in the prior year.

 

What the boss says: Chris Brinsmead, chairman

Commenting on the RDI takeover offer, Brinsmead said: "Collagen has built a high-performance team and significant portfolio of customers and projects, well positioning the Company in the exciting regenerative biomaterials and tissue market"

"The offer from RDI recognises this strategic value and provides an attractive opportunity for shareholders to realise immediate value at a significant revenue multiple and premium to both the historical and prevailing share price."

 

Inflexion points

  • Completion of RDI takeover
  • More deals for regenerative medicine technology
  • Order book growth

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