Tornier – TRNX – To Acquire OrthoHelix Surgical Designs
NASDAQ: TRNX), a global medical device company focused on providing surgical solutions to orthopaedic extremity specialists, announced that it has signed a definitive agreement to acquire OrthoHelix Surgical Designs, Inc. for $135 million plus additional payments over two years, which will be based on achieving certain revenue growth milestones.
OrthoHelix is an innovative, high growth, and EBITDA positive company that is focused on developing and marketing specialty implantable screw and plate systems for the repair of small bone fractures and deformities predominantly in the foot and ankle. OrthoHelix’s sales for the calendar year 2012, which are all based in the United States, are projected to reach approximately $29 million, an increase of over 30% compared to 2011. OrthoHelix’s gross profit margin on 2012 sales is expected to exceed 80% and EBITDA is expected to be positive. The addition of OrthoHelix is expected to more than double Tornier’s lower extremity revenue and allow Tornier to increase its focus on foot and ankle surgeons.
Under the terms of the agreement, Tornier has agreed to acquire OrthoHelix for $135 million, which will consist of $100 million in cash and $35 million in Tornier’s stock. Tornier intends to use cash on hand and borrowings to pay for the acquisition. Upon closing, the transaction is expected to be dilutive to Tornier’s 2013 earnings per share, excluding amortization and stock compensation expense, and acquisition and integration related charges, or cash earnings per share, but accretive to its cash earnings per share in 2014.
OrthoHelix will continue to operate under the OrthoHelix name, retain all of its product brand names in the market, and customers will continue to be served by OrthoHelix and their distribution partners. Central operations of the OrthoHelix business will remain based in Medina, Ohio as will its 80 dedicated employees.
TRNX – Outlook
Excluding OrthoHelix acquisition and integration related charges, Tornier is reiterating its previously issued standalone financial guidance for fiscal 2012 and third quarter, which is contained in Tornier’s earnings release issued on August 7, 2012. Tornier expects to issue combined fiscal 2012 guidance reflecting the acquisition of OrthoHelix at the appropriate time once the transaction is closed.
About Tornier – TRNX
Tornier (TRNX) is a global medical device company focused on serving extremities specialists who treat orthopaedic conditions of the shoulder, elbow, wrist, hand, ankle and foot. TRNX’s broad offering of over 90 product lines includes joint replacement, trauma, sports medicine, and biologic products to treat the extremities, as well as joint replacement products for the hip and knee in certain international markets.
About OrthoHelix Surgical Designs, Inc.
OrthoHelix is a medical device company developing a comprehensive line of implants and instruments for use in small bone reconstructive surgery.
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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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