RTI Biologics Inc. (RTIX), a provider of orthopedic and other biologic implants, plans to acquire privately held Pioneer Surgical Technology, headquartered in Marquette, Mich. The Pioneer acquisition supports RTI's strategic initiatives to expand its current implant portfolio into metals and synthetics and to grow direct distribution.
Pursuant to the merger agreement, RTI would pay $130 million cash to acquire Pioneer's outstanding stock. RTI said it has received a commitment from TD Bank, N.A., TD Securities "USA" LLC and Regions Bank for a 5-year, $80 million senior secured facility, including a $60 million term loan and a $20 million revolving credit facility. Further, RTI has agreed to a $50 million private placement of convertible preferred equity with Water Street, a healthcare-focused private equity firm.
RTI's president and chief executive stated, "This acquisition will bring immediate scale, allowing us to reach our strategic goals and take advantage of growth opportunities more quickly than either company could do independently."
The transaction, which may close in the third quarter of 2013, would be funded via. a combination of cash on hand, a new credit facility and a concurrent private placement of convertible preferred equity from Water Street Healthcare Partners.
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