Landec Takes Over Lifecore Biomedical From Warburg Pincus

As per the agreement, Landec has acquired the stock of Lifecore for $40m in cash and assumed debt of approximately $4m. In addition, the agreement includes a future cash earn-out potential for Warburg Pincus of up to $10m based on Lifecore achieving certain financial targets during calendar years 2011 and 2012.

In conjunction with the acquisition, Landec secured bank financing of $20m. The financing has a five year term with a fixed interest rate of approximately 4.2%. After the acquisition, Landec’s cash and marketable securities balance will be approximately $50m. As a result of this transaction, Landec will record approximately $2.9m of acquisition related expenses during the fourth quarter of fiscal year 2010.

Gary Steele, chairman and CEO of Landec, said: “The acquisition of Lifecore significantly advances our stated strategy to acquire a company that expands our capabilities in materials science, specifically in the area of biomaterials. Hyaluronic acid (HA) is naturally present in the skin, cartilage and fluid of humans and provides lubricating, connective and shock absorbing functions in both joints and soft tissue.

Dennis Allingham, president and CEO of Lifecore, said: “We welcome the strategic acquisition of Lifecore by Landec, which strengthens our commitment to the development of technically advanced hyaluronan-based specialty medical products that can offer treatment advantages and compatibility within the human body.

“We are excited about the potential opportunities to apply Landec’s knowledge of polymer technology to our new product concepts as a means to expand our product offerings, bring greater value to our customers and attract market-leading partners.”