Derma Sciences acquires Medihoney brand, enters 10-year supply agreement
Derma Sciences announced it has purchased the Medihoney brand and related intellectual property and goodwill from its long-term partner Comvita. Consideration is an upfront payment of $13.25M in cash, with an additional $5M potentially payable in the form of an earn-out upon achievement of future annual sales milestones. Prior to the acquisition, Derma Sciences held the exclusive global license for the Medihoney brand and patents for the medical and professional market segments. The purchase eliminates Derma Sciences' obligation of royalty payments to Comvita on the sale of Medihoney products, which royalties amounted to $1.6M in 2016. Additional agreements entered into at the time of the acquisition include an exclusive medical honey supply agreement from Comvita to Derma Sciences for 10 years with fixed pricing terms for two years, a worldwide licensing agreement from Derma Sciences to Comvita to use the purchased intellectual property in the over-the-counter market, and the continued manufacture of honey-based products by Derma Sciences for Comvita for OTC consumer product sales.