Wright Medical Group N.V. Announces Acquisition of IMASCAP SAS (press release)
Wright Medical Group N.V. (NASDAQ:WMGI) today announced the acquisition of IMASCAP SAS, a leader in the development of software-based solutions for preoperative planning of shoulder replacement surgery. The transaction ensures exclusive access to breakthrough software enabling technology and patents to further differentiate Wright’s product portfolio and to further accelerate growth opportunities in Wright’s global Extremities business.
Under the terms of the agreement with IMASCAP, Wright acquired 100% of IMASCAP’s outstanding equity on a fully diluted basis for total consideration, net of acquired cash, of €75.1 million or approximately $88.8 million, consisting of approximately €39.7 million, or approximately $46.9 million, in cash and approximately €13.2 million, or approximately $15.6 million, of Wright ordinary shares, payable at closing, and approximately €22.2 million, or approximately $26.3 million, in potential earnouts and milestone payments for new software modules and a potential future implant system.
IMASCAP’s Glenosys technology is the preoperative planning software behind Wright’s BLUEPRINT™ 3D planning software, which allows the surgeon to simulate the position of a shoulder prosthesis using CT image data. The surgeon is able to visualize the shoulder in 3D and rotate through the complete range of motion in any direction. Before the surgery, the surgeon can optimize the surgical plan adapted to the patient to choose the best implant from a range of possibilities. With its simple and intuitive interface, this virtual surgical plan is seamlessly translated into the operating room on the day of surgery offering the potential for reduced surgical time, better outcomes and less inventory.
Robert Palmisano, president and chief executive officer, commented, “Wright, and previously Tornier, has been involved with IMASCAP for many years with our BLUEPRINT case planning software, and we have seen first-hand the innovation, creativity and differentiated solutions that the IMASCAP team has developed. Software-enhanced solutions are the future, and with the acquisition of IMASCAP, we have the opportunity to take a significant lead in this area. We are thrilled that we had an opportunity to acquire IMASCAP, which is the company that has developed the technology behind our BLUEPRINT case planning software for our shoulder portfolio. This is a highly differentiated, enabling technology for the shoulder and has a number of potential applications to enhance our PROPHECY planning for ankles as well.”
Palmisano continued, “While our BLUEPRINT planning software is a significant differentiator today, IMASCAP has a rich pipeline of potential breakthrough technologies under development and patent-pending. We believe the future of orthopaedic implant surgery will include advanced elements of artificial intelligence and augmented reality. When fully developed, we believe such software enabled surgery will leapfrog the current mechanical approaches some orthopaedic companies have developed primarily for hip and knee replacement surgery.”
Palmisano further commented, “IMASCAP is led by its founder and CEO, Jean Chaoui. Jean has an impressive background, with degrees in Biomedical Engineering from Damascus University and Telecom Brittany (Masters & PhD) with a focus in Biomedical Imaging. Jean has received 11 patents and has written more than 30 scientific publications in the field of computer assisted surgery, and he has completed multiple projects in the areas of image and bio-signal processing, artificial intelligence and brain/computer interface. He is a recent recipient of the MIT Technology Review – Top 10 French Innovators under 35 and a Fellow in the Young Transatlantic Innovative Leaders Initiative, representing France. We are delighted that Jean and the entire IMASCAP team are joining Wright.”
Jean Chaoui, president and chief executive officer of IMASCAP, added, “We are delighted to have found an excellent strategic buyer in Wright, a company that shares IMASCAP’s commitment to technological leadership and who is deeply committed to the success of our technology. We believe that Wright, with its global leadership position in the extremities market and expertise in medical education and product development, is the ideal partner to realize the full potential of IMASCAP’s technology and product pipeline and will continue to provide the focus and investment to enable it to reach its full potential. Also, very importantly, this will provide our employees with enhanced opportunities for career growth and development. We look forward to an exciting future as part of Wright Medical.”
IMASCAP has no revenues; therefore, there is no impact to Wright’s previously provided full-year 2017 annual net sales guidance of $740 million to $745 million. Due to the timing of the closing, the company anticipates incurring minimal incremental expenses in 2017, and therefore is maintaining its current full-year 2017 non-GAAP adjusted EBITDA from continuing operations guidance range of $84 million to $88 million. The company currently plans to offer this important enabling technology at no cost to physicians who are implanting Wright’s shoulder products. Wright will provide additional information on the financial impact of this transaction and 2018 guidance on its fourth quarter 2017 earnings call, which is currently scheduled for February 27, 2018.
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.wright.com.