Orthofix divests its sports medicine business, Breg, to the private equity firm for $157.5M cash

Orthofix International Announces Signing of Agreement to Sell Sports Medicine Business Unit to Water Street Healthcare Partners (press release)

Orthofix International N.V., (NASDAQ:OFIX - News) (the Company) announced today that it entered into a definitive agreement under which Water Street Healthcare Partners, a strategic private equity firm focused exclusively on the health care industry, will acquire Orthofix’s Sports Medicine Business Unit, which operates as Breg, Inc. The purchase price is $157.5 million and is payable in cash at closing, which is expected to occur during the second fiscal quarter of 2012. Net proceeds to Orthofix from the sale are anticipated to be approximately $140 million, which will be used for the prepayment of debt as required by Orthofix’s existing credit agreement.
The Company acquired its Sports Medicine business in 2003 with the purchase of Breg, which is headquartered in Carlsbad, CA. The Sports Medicine business provides a portfolio of bracing and cold therapy products to treat a variety of sports medicine related conditions.

“With the divestiture of the Sports Medicine business, we are now able to devote Orthofix’s full resources and attention to strengthening our value proposition around our repair hardware and regenerative biologics and stimulation solutions,” said Robert Vaters, President and Chief Executive Officer. “We believe this deleveraging event and resulting borrowing capacity will allow us to expand and enhance both our Spine and Orthopedic business units in a way that accelerates our ability to create shareholder value.”

“We are pleased that Orthofix has entrusted Water Street to grow Breg. We see tremendous opportunity to build on Breg’s leadership position and create greater long-term value in the organization. We will leverage our team’s deep medical products knowledge, extensive operating experience and network of relationships to strategically expand Breg’s innovative products and global presence,” said Chris Sweeney, partner, Water Street.

Upon closing, the Company will file the required pro forma financial results reflecting the disposition following the consummation of the sale transaction with the Securities and Exchange Commission, including any impact of pre-closing liabilities the Company will retain. J.P. Morgan Securities LLC provided a fairness opinion to the board of directors related to the transaction.

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OrthoStreams’ goal is to deliver fresh daily Orthopedic industry news, research links and commentary – free of charge. The blog has a very loyal following in the Ortho space with most visitors checking in daily. Tiger Buford is the Editor. He is a 29 year veteran in the Orthopedics device industry, and known as a people connector with his finger on the pulse of the industry. He can be reached at tigerbuford AT gmail.com.

1 Comment

  1. Bought them in 2003 for $150m, then sold them in 2012 for $157.5m but really $140m… current revenues ~$27.5m or about 5x the real sale $. so Orthofix sold at a loss after 9 years, boy are they doing well!

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