Genzyme Makes Biosurface M&A

Genzyme of the USA is acquiring US tissue repair company Bio-Surface Technology which it will merge to form a new business unit to be known as Genzyme Tissue Repair (see also page 19). GTR will be one of the largest operations in its field, starting with more than $6 million in annual product sales and an estimated annual revenue of around $1 billion, with potential to extend sales through the USA, Europe, and other markets. The potential for the worldwide tissue repair market is $10 billion.

Initially, Genzyme will contribute $10 million to the new division, while Bio-Surface will bring an estimated $16 million in cash. Genzyme will bring a further $30 million in equity contributions over the next three and a half years.

Once the deal is approved, BioSurface shareholders will receive one share of GTR common stock for around 1.7 BioSurface shares. Genzyme shareholders will receive a tax-free dividend of one share of GTR for around 7.4 shares of Genzyme. Genzyme shareholders will retain their Genzyme Corp common stock, which will reflect GTR's value as a general division of Genzyme.