Monday, July 11, 2016
Wright Medical Group N.V. announced that it has received a binding offer under which Corin Orthopaedics Holdings Limited (Corin) would acquire the large joints (hip/knee) business from Wright Medical Group N.V. Under the terms of the offer and following a consultation process with the employee works council in France, Corin would acquire all of the legacy Tornier large joints business for a purchase price of €29.7 million in cash, or approximately $33 million based on today’s currency exchange rates, subject to customary closing adjustments. Net after-tax proceeds for Wright Medical, after payment of estimated transaction and transition costs, are estimated to be approximately $20 million. The proposed transaction is expected to close by the end of the third quarter or early in the fourth quarter of 2016, subject to customary closing conditions.
The legacy Tornier large joint assets that are the subject of this binding offer consist of hip and knee implants sold primarily in France and other European countries. The large joints business has established hip and knee franchise brands, which include the Dynacup® and Meije Duo® hip implants and HLS KneeTec® and HLS Noetos® knee implants. Wright will retain the exclusive ability to use the Tornier name on its products, and after a transition period, the hip and knee products acquired by Corin will transition to the Corin name.
Robert Palmisano, president and chief executive officer of Wright Medical, stated, “Our large joints business has excellent products and significant market share in key European markets with a loyal customer base. However, this business is not in line with our strategy to be the premier extremities and biologics company. The sale of this business to a strong business partner that is focused on the hip and knee market is the logical next strategic step for Wright. Once completed, this should enable both businesses to flourish as separate companies focused in their unique market spaces with strong management teams that will position them for continued success. In addition, post-closing, we will be able to devote our full resources and attention on accelerating growth opportunities in the high-growth Extremities and Biologics markets and believe this will enhance our ability to create significant shareholder value.”
Palmisano continued, “We are pleased we have found an excellent strategic buyer in Corin, a company that is deeply committed to the success of the hip and knee business 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 are grateful to our large joint employees for their dedication and hard work.”
After closing, the legacy Tornier large joints business will continue to be headquartered in Montbonnot, France.
Stefano Alfonsi, chief executive officer of Corin, commented, “We are delighted with the acquisition of Tornier’s clinically proven portfolio of hips and knees. Tornier’s hip and knee portfolio has been a key part of the history of Orthopaedics and has always been a significant driver of improving the clinical outcome for patients across the globe. Corin is focused on hip and knee joint replacement and is excited to become a major part of the innovative French clinical community. We are looking forward to working closely with Tornier’s thought leaders and surgeons and to welcoming their talented large joints team based in Montbonnot into our global organisation. We trust we will be worthy custodians of Tornier’s large joints portfolio.”
Following the works council consultation process, Wright Medical will be able to accept the binding offer and the parties would immediately thereafter execute a sale and purchase agreement. The proposed transaction is expected to close by the end of the third quarter or early in the fourth quarter of 2016, subject to customary closing conditions.
Wright Medical is currently determining the exact impact of the large joints business once it is moved to discontinued operations. Wright’s current estimate of the preliminary impact of the large joints business that was included in its previous annual guidance is net sales of approximately $37 million and adjusted EBITDA of approximately $5 million to $6 million, resulting in adjusted guidance for net sales from continuing operations for full-year 2016 in the range of $668 million to $678 million. Despite the negative impact from this transaction to current year adjusted EBITDA from continuing operations, Wright is maintaining its previously communicated guidance for 2016 adjusted EBITDA from continuing operations, as described later in this release under the heading “Non-GAAP Financial Measures”, of a range of $30 million to $35 million. Wright plans to provide additional details regarding the anticipated financial impact of the transaction when it reports its second quarter 2016 results.
In connection with this transaction, Deloitte Corporate Finance LLC, Dechert LLP, and Simmons & Simmons LLP advised Wright Medical.
Source : ir.wright.com
