Wright Medical acquires the French foot and ankle company Biotech International for $80M
Wright Medical to buy French firm for $75 million (Memphis Business Journal)
Wright Medical Group, Inc. (NASDAQ: WMGI) announced today that it has entered into a definitive agreement to acquire Biotech International (Biotech), a leading, privately held French orthopaedic extremities company. The transaction will significantly expand Wright’s direct sales channel in France and international distribution network and add Biotech’s complementary extremity product portfolio to further accelerate growth opportunities in Wright’s global Extremities business.
Under the terms of the agreement, Wright will acquire 100% of Biotech’s outstanding equity shares on a fully diluted basis at a total offer price of up to $80 million as follows: $75 million payable at closing, comprised of approximately $55 million of cash and $20 million of Wright common stock, and up to an additional $5 million of cash contingent upon the achievement of certain revenue milestones in 2014 and 2015. All Wright common stock issued in connection with the transaction will be subject to a one-year lockup.
The transaction is expected to close in the fourth quarter of 2013. As part of the transaction, Biotech will spin off its dental business before the close.
Robert Palmisano, president and chief executive officer of Wright, commented, “The acquisition of Biotech International is an excellent fit for our Extremities business, enabling us to immediately expand our direct foot and ankle presence in Europe and add a base of extremity revenue that we can effectively grow on a go-forward basis. In addition, Biotech’s products complement our existing foot and ankle portfolio and include several specialized products that expand our extremities product offering. We plan to utilize Biotech’s strong direct sales channel in France and established distributor presence in emerging markets to extend the reach of our international distribution network and further accelerate growth opportunities in our global Extremities business.”
Bruno Thevenet, president of Biotech International, and Philippe Veran, co-founder, added, “We are delighted to partner with a company that shares Biotech’s commitment to building a high-growth, global Extremities business. We believe that Wright Medical, with its global leadership position in the foot and ankle market and expertise in medical education and product development, is the ideal partner to accelerate growth and realize the full potential of Biotech’s sales channels around the world. We look forward to working with Wright to ensure a seamless transfer and the continued success of our business as part of Wright Medical.”
On a U.S. GAAP basis (unaudited), Biotech International had extremity revenues in the $15 million range for the twelve months ended June 30, 2013, primarily in France and other international countries, and minimal revenue in the U.S. Although Wright cannot finalize the purchase price allocation and fair value assessment of the contingent consideration until the closing, and thus cannot yet assess the exact impact on its future GAAP earnings, Wright anticipates that the transaction will be neutral to adjusted EBITDA in 2014 and accretive thereafter. Wright will provide additional information on the financial impact of this transaction on its third quarter 2013 earnings call, which is scheduled for November 4, 2013.
For more information on this transaction, please refer to the investor presentation that is available in the Investor Relations section of Wright’s website at www.wmt.com.
About Wright Medical
Wright Medical Group, Inc. is a global orthopaedic company that provides solutions that enable clinicians to alleviate pain and restore their patients’ lifestyles. The company is the recognized leader of surgical solutions for the foot and ankle market and markets its products in over 60 countries worldwide. For more information about Wright Medical, visit www.wmt.com.
About Biotech International
Biotech International is a leading French manufacturer that specializes in the design, production and marketing of surgical implants and advanced fixation technologies for the Extremities market. For more information about Biotech International, visit their websites atwww.biotech-international.com/en and www.biotech-ortho.com/en.