Shareholders Approve Tornier-Wright Merger

Shareholders of Wright Medical Group Inc. and Tornier N.V. have approved the proposed $3.3 billion merger between the two companies.

“We are convinced this combination will create the premier, high-growth Extremities-Biologics company with a broad global reach,” Robert Palmisano, president/CEO of Memphis, Tenn.-based Wright Medical, said in a news release. “Together, we will have one of the most comprehensive upper extremity, lower extremity and biologic product portfolios in the market, extending our leadership position and further accelerating our growth opportunities and path to profitability, all of which we believe will generate long-term value for our shareholders.”

The deal now awaits approval by the U.S. Federal Trade Commission (FTC), and could close by the third quarter. In order to alleviate certain concerns, Tornier is looking to divest a portion of its lower extremity lines.

“Both companies have built a deep and loyal customer base and have highly complementary product portfolios, positioning the combined entity to deliver meaningful value to our shareholders,” said David Mowry, president/CEO of Tornier. “We believe that partnered together, Wright and Tornier will become the fastest-growing company in the extremities-biologics industry.”

The legal address for Wright Medical Group N.V., will be located in the Netherlands, where Tornier has been based for about eight years. Wright’s U.S. headquarters will remain in Memphis.

Announced in Oct. 2014, the merger is worth an estimated $3.3 billion. As structured, when the deal closes, Wright shareholders will own 52 percent of the shares of the combined firm and Tornier’s investors will own approximately 48 percent. 

Palmisano will lead the new company while Mowry will be chief operating officer.

The acquisition of Tornier by Wright is one of the first to close since the FTC tightened its rules to crack down on tax inversion deals (this is one). These agreements relocate some or all of corporate business to a tax-favorable country in order to reap the taxation benefits.

In February, the FTC extended the waiting period for the deal close to give Tornier time to address the agency’s concerns about its lower extremity products. Once Tornier responds to the FTC’s product line concerns, the agency has 30 days to sign off on the merger.