Tornier N.V. (TRNX) has reached a definitive agreement to acquire OrthoHelix Surgical Designs Inc. for $135 million plus additional payments over two years, which would be based on achieving certain revenue growth milestones.
OrthoHelix's sales for the calendar year 2012, which are all based in the United States, are projected to reach about $29 million, an increase of over 30% versus 2011; while gross profit margin is anticipated to exceed 80% and EBITDA 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.
According to Tornier, the combination of OrthoHelix's broad line of plate and screw systems with Tornier's ankle arthroplasty, biologics, and other foot and ankle implants is expected to create one of the broadest product and technology offerings to lower extremity surgical specialists in the orthopedic industry. Further, Tornier intends to utilize its strong international distribution channel to accelerate OrthoHelix's geographic expansion beyond its current sales base in the U.S.
Pursuant to the deal, Tornier would buy OrthoHelix for $135 million, which would comprise $100 million cash and $35 million in Tornier's stock. Tornier plans to use cash on hand and borrowings to pay for the acquisition. Following this, 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 would continue to operate under the OrthoHelix name, retain all of its product brand names in the market, and customers would continue to be served by OrthoHelix and their distribution partners.
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