May 5, 2010 (FinancialWire) — Landec Corp. (NASDAQ: LNDC), a firm that develops and markets patented polymer products for food, agriculture, personal care and drug delivery applications, said that it has acquired Lifecore Biomedical, Inc. from Warburg Pincus Private Equity IX, LP. When acquired by Warburg Pincus in March 2008, Lifecore was comprised of two divisions, the Dental division and the Hyaluronan division. The Dental Division was merged into a Warburg Pincus portfolio company.

The Hyaluronan Division, now Lifecore, based in Chaska, Minnesota, is a supplier of premium hyaluronan-based biomaterials for the medical and veterinary markets.

Lifecore hyaluronan biopolymers are used in a range of therapeutic treatments, including cataract surgery, degenerative joint disease, spinal defect filling, medical device coatings, cosmetic soft tissue enhancement and equine osteoarthritis, as well as in numerous research initiatives.

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.” Under the agreement, Landec acquired the stock of Lifecore for $40 million in cash and assumed debt of around $4 million. In addition, the agreement includes a future cash earn-out potential for Warburg Pincus of up to $10.0 million based on Lifecore achieving certain financial targets during calendar years 2011 and 2012.

In conjunction with the acquisition, Landec said it secured bank financing of $20 million. 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 around $50 million. As a result of this transaction, Landec will record around $2.9 million of acquisition related expenses during the fourth quarter of fiscal year 2010.

For Landec’s fiscal year 2011, which begins May 31, 2010, Lifecore’s revenues are projected to be in the range of $26 million to $28 million.

California-based Landec is a materials science company, leveraging its capability in polymer science and bio-application development in order to commercialize new products within a variety of life science fields, including food, agricultural, personal care and drug delivery applications.

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