Integra LifeSciences Holdings Corporation · NASDAQ:IART
Integra LifeSciences — Merger or Acquisition (February 2017)
26 slides from Integra LifeSciences's merger presentation, Feb 15, 2017
Slide 1: Integra LifeSciences Plans to Acquire Codman Neurosurgery from Johnson & Johnson
Integra LifeSciences Plans to Acquire Codman Neurosurgery from Johnson & Johnson February 15, 2017 Exhibit 99.2
Slide 2: Safe Harbor / Non-GAAP Financial Measures
Safe Harbor / Non-GAAP Financial Measures This presentation contains “forward-looking statements”, including statements regarding the proposed transaction and the ability to consummate the proposed transaction. Statements in this document may contain, in addition to historical information, certain f
Slide 3: Non-GAAP Financial Metrics
Non-GAAP Financial Metrics In addition to our GAAP results, we provide organic revenues, adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted net income, adjusted EPS, free cash flow and adjusted free cash flow conversion. Organic revenues consist of total rev
Slide 4: Today's Agenda
Strategic Rationale Peter Arduini President & CEO Overview & Integration Dan Reuvers Corporate VP, President of Specialty Surgical Solutions Financial Impact Glenn Coleman, CFO & Corporate VP, International Conclusion & Q&A Peter Arduini President & CEO Today’s Agenda
Slide 5: Codman Neurosurgery Generates Significant Shareholder Value
Codman Neurosurgery Generates Significant Shareholder Value Strong strategic fit, advancing us toward relevant scale, as well as our aspirational goals of $2 billion in revenue and 30% adj. EBITDA Provides established and well-recognized Codman brand and trademark Enhances our Specialty Surgical Sol
Slide 6: Comprehensive Neurosurgery Products & Services
Drives Innovation For Surgeons And Patients Expands Commercial Resources Worldwide Adds Complementary Product Portfolio Accelerates Global Infrastructure, Scale Enhances Global Position in Neurosurgery Comprehensive Neurosurgery Products & Services
Slide 7: Codman Neurosurgery: A Strategic Carve-out Acquisition
Codman Neurosurgery: A Strategic Carve-out Acquisition Background Founded in 1838 by Thomas Codman; acquired by Johnson & Johnson in 1960s 600+ employees; ~250 sales reps globally Products in 50+ countries; 52% of historical sales outside the U.S. Manufacturing and R&D facility in Le Locle, Switzerl
Slide 8: Codman Neurosurgery Advances Our Strategy In Several Areas
Accelerate Growth Execute Optimize Limit Uncertainty Execute New Products Drive 25% of Organic Growth Invest in Our Team Deliver on Financial Goals Optimize Optimize Commercial Channel Regenerative Tech to 45%+ of Portfolio G&A Leverage via Systems & Structure Accelerate Growth Take Share in New, Fa
Slide 9: Integra's Current International Presence
Lat Am Integra’s Current International Presence… 77% U.S. 23% International Europe 2016E Total Revenue Asia
Slide 10: International Presence Significantly Expanded With Codman Acquisition
+100% Commercial Resources +35% Commercial Resources …Is Significantly Expanded With Codman Acquisition, While… 70% U.S. 30% International Europe 2016E Pro Forma Total Revenue Lat Am +66% Commercial Resources Asia
Slide 11: Adding Global Infrastructure
…Adding Global Infrastructure Integra’s pro forma 2016 international revenue nearly doubles to ~$400 million, 30% of total Benefits Integra’s two global divisions by building out shared global infrastructure 225+ international commercial resources Broad expansion of customer service, distribution an
Slide 12: Complementary Product Portfolios Fill Gaps
DirectLink® ICP Monitoring interfaces Programmable shunt valves BactiSeal® Antimicrobial Catheters Licox® Oxygen monitoring Camino® ICP monitoring Patties / Strips Aneurism Clips Cranial Perforators DuraForm® Bone Putty Electrosurgery products DuraGen® DuraSeal® Bovine Pericardium ENT Surgical headl
Slide 13: Long, Successful History of Carve-Out Integrations
Brand / Business Acquired From Closing Date Revenue Acquired Impact Salto® Talaris and Futura™ Tornier N.V. Oct 2015 <$10M Top 3 in ankle and toe replacements Growth of 20%+ since acquisition Medtronic Oct 2014 ~$30M #1 brand of ENT surgical instruments Growth of 10%+ since acquisition Covidien Jan
Slide 14: Confident We Can Achieve Identified Revenue And Cost Targets
Confident We Can Achieve Identified Revenue And Cost Targets As We Build A Significantly Larger Global Organization Dedicated Integration Team to Execute Plan Created two separate, dedicated integration teams for Derma Sciences and Codman Neurosurgery; focused on minimizing disruptions to the ongoin
Slide 15: Transaction Terms
Transaction Terms Integra has made a binding offer to acquire Johnson & Johnson’s Codman Neurosurgery business for a price of $1.045 billion in cash Financing Integra has committed financing from Bank of America Merrill Lynch and JPMorgan Chase Bank, N.A. in connection with the planned acquisition I
Slide 16: Pro Forma+ Integra: Committed to 2018 Financial Targets
Pro Forma+ Integra *Based on preliminary 2016 Revenue/EPS as provided on 1’10’17 | ^2016 Guidance, last provided Oct. 2016 | + ProForma incl. expected financial impact of Derma Sciences & Codman Neurosurgery 2016* 2018 Financial Targets 2018 Pro Forma+ Organic Revenue Growth ~9%* 6% - 8% with Acquis
Slide 17: Proven Track Record of Building Relevant Scale with M&A
International Distribution Sales Channel Leverage Relevant Scale Technology Platforms Codman Neurosurgery Strategic M&A as a Core Competency Derma Sciences TEI Salto Talaris Metasurg Codman Neurosurgery MicroFrance DuraSeal Proven Track Record of Building Relevant Scale with M&A Wound Care Extremiti
Slide 18: Accelerating Toward Aspirational Goals
2016* Aspirational Goals with Scale Recent Deal Impact Revenue $992 M* $2 B Adj. Gross Margin 69.5% - 70.0% 72% - 73% Adj. EBITDA Margin 23.5% - 24.0%^ ~30% International Revenue 23.0% +30% Accelerating Toward Aspirational Goals *Based on preliminary 2016 Revenue/EPS as provided on 1’10’17 | ^2016 G
Slide 19: Codman Neurosurgery Generates Significant Shareholder Value
Codman Neurosurgery Generates Significant Shareholder Value Strong strategic fit, advancing us toward relevant scale, as well as our aspirational goals of $2 billion in revenue and 30% adj. EBITDA Provides established and well-recognized Codman brand and trademark Enhances our Specialty Surgical Sol
Slide 20: Appendix
Appendix
Slide 21: Pro Forma 2016 Total Revenue Reconciliation
Pro Forma 2016 Total Revenue Reconciliation (In millions) 2016 Integra preliminary reported revenue $992 Derma Sciences preliminary pro forma* revenue 96 Codman Neurosurgery revenue (unaudited) 374 Less Electrosurgery revenue (46) Less a preliminary estimate of approximately 50% of revenue from non-
Slide 22: 2016 Organic Revenue Guidance and Reconciliation
Full Year 2016 Acquired growth: ~4.5% (inc. partial year contributions from TEI, Salto Talaris and Tekmed) Minimal currency impact at current rates Discontinued products represent a headwind of about (1.0%) 2016 Organic Growth*: ~9% Reported Growth: 12% - 13.5% 2016 Organic Revenue Guidance and Reco
Slide 23: 2016 Preliminary Adj. EPS Commentary
2016 Preliminary Adj. EPS Commentary (As of Jan. 10, 2017 Preannouncement) Integra pre-announced full-year 2016 GAAP and adjusted diluted earnings per share at or above the mid-point of the guidance range of $0.91 to $0.94 and $1.73 to $1.77 post-stock split, respectively. At this point during our y
Slide 24: 2016 Guidance (As of Oct. 27, 2016)
% of revenue Oct 2016 Guidance Gross Margin 64.5% - 65% Adj. Gross Margin 69.5% - 70% Net Income $71.1 - $74.4M Adj. Net Income $134.1 - $136.4M Adj. EBITDA ~23.5% *Free cash flow = Operating Cash Flow less CapEx. **The Company calculates free cash flow conversion by dividing its free cash flow by a
Slide 25: 2016 GAAP Net Income to Adj. Net Income Guidance Reconciliation
2016 GAAP Net Income to Adj. Net Income Guidance Reconciliation* Recorded Year to Date Projected Year Ended (In thousands, except per share amounts) September 30, 2016 December 31, 2016 Low High GAAP net income $ 46,316 $ 72,080 $ 74,380 Non-GAAP adjustments: Global ERP implementation charges 12,386
Slide 26: 2016 Guidance for Special Charges by P&L Line
2016 Guidance for Special Charges by P&L Line* Item YTD Amount FY Guidance COGS SG&A R&D Amort. Interest (Inc)Exp Tax Global ERP implementation charges $ 12,386 $ 15,000 $ — $ 15,000 $ — $ — $ — $ — Structural optimization charges 5,540 10,500 5,000 5,500 — — Acquisition-related charges 16,996 19,00
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