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Wright Medical Group (WMGI) and BioMimetic Therapeutics (BMTI) – To Combine Businesses

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Wright Medical Group, Inc. (NASDAQ: WMGI) and BioMimetic Therapeutics, Inc. (NASDAQ: BMTI) announced that they have entered into a definitive agreement for a business combination of Wright and BioMimetic, both publicly traded, Tennessee-based companies. Wright is an orthopedics company with a market-leading lower extremities franchise. BioMimetic is focused on developing regenerative medicine products to promote the healing of musculoskeletal injuries and diseases with a novel protein therapeutic product, Augment® Bone Graft, under late stage FDA review as a replacement for autologous bone graft in foot and ankle fusions. The transaction will combine BioMimetic’s breakthrough biologics platform and pipeline with Wright’s established sales force and product portfolio, to further accelerate growth opportunities in Wright’s Extremities business.

Under the terms of the agreement, the transaction has a total potential value for BioMimetic (BMTI) shareholders of approximately $380 million, or $12.97 per share, based on Wright’s closing stock price on Friday, November 16, 2012. Each share of BioMimetic common stock will be converted into the right to receive an upfront payment of $1.50 in cash and 0.2482 shares of Wright common stock. The upfront payment values BioMimetic at approximately $190 million, or $6.47 per share, based on Wright’s closing stock price on November 16, 2012. Each BioMimetic share will also receive one tradable Contingent Value Right (CVR), which entitles its holder to receive additional cash payments of up to $6.50 per share, which are payable upon receipt of FDA approval of Augment® Bone Graft and upon achieving certain revenue milestones.

Any contingent milestone payments will be paid in cash. The CVR payments to BioMimetic shareholders are structured as follows:

  • $3.50 per share upon FDA approval of Augment® Bone Graft;
  • $1.50 per share upon the achievement of $40 million in trailing twelve month sales for all products contributed by BioMimetic;
  • $1.50 per share upon the achievement of $70 million in trailing twelve month sales for all products contributed by BioMimetic.

The latter two sales milestone payments cannot be made sooner than 24 and 36 months post-closing of the transaction, respectively.

The transaction is expected to close in the first quarter of 2013 and is subject to customary closing conditions, including BioMimetic shareholder approval. The transaction received the unanimous approval of the board of directors of both Wright and BioMimetic. In addition, several key shareholders of BioMimetic have evidenced their support of the transaction by entering into agreements to vote in favor of the transaction.

About Wright Medical – WMGI

Wright Medical Group, Inc. (WMGI) is a global orthopaedic medical device company and a leading provider of surgical solutions for the foot and ankle market.

About BioMimetic Therapeutics, Inc. – BMTI

BioMimetic Therapeutics, Inc. (BMTI) is a biotechnology company specializing in the development and commercialization of clinically proven products to promote the healing of musculoskeletal injuries and diseases, including therapies for orthopedics, sports medicine and spine applications. All Augment® branded products are based upon recombinant human platelet-derived growth factor (rhPDGF-BB), which is an engineered form of PDGF, one of the body’s principal agents to stimulate and direct healing and regeneration. Through the commercialization of this patented technology, BMTI seeks to become the leading company in the field of regenerative medicine by providing new treatment options for the repair of bone, cartilage, tendons and ligaments.

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edliston
Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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