Alphatec Terminates EOS imaging Acquisition

Alphatec Holdings Inc., a medical device company dedicated to revolutionizing the approach to spine surgery, has terminated the Tender Offer Agreement (“TOA”), dated February 26, 2020, under which it was to acquire EOS imaging, SA (“EOS”), for up to $88 million, plus debt retirement of $33.9 million, in a combination of cash and equity.
 
This decision follows ATEC’s consideration and analysis of the expected ongoing market effects of the COVID-19 pandemic. Based upon its assessment, ATEC concluded that a “Material Adverse Effect” (as defined in the TOA) has occurred, resulting in circumstances that are no longer conducive to completion of the transaction described in the TOA.  ATEC notified EOS of its termination decision, as required by the TOA, in a letter dated April 24, 2020.
 
“This has been a difficult, disappointing decision,” said Pat Miles, ATEC’s Chairman and CEO. “Both companies have worked so hard and so cooperatively, over many months, to bring this transaction together. On behalf of the entire ATEC Family, I want to personally thank EOS for its commitment and hospitality throughout this process.  It has been a thrill for me and other members of ATEC leadership to engage directly with so many of the talented EOS team members, and to see firsthand their prowess and passion for their work—attributes both our companies share. While the acquisition is no longer feasible as contemplated, I continue to believe that ATEC’s and EOS’s interests are best served through a strategic collaboration. I have shared my belief with EOS leadership, and look forward to the opportunity to continue to explore ways that our companies can work together to bring informed operative experiences to spine.”
 
In connection with the termination of the TOA, ATEC and Perceptive Credit Holdings III, LP, have agreed to terminate the commitment letter for up to $160 million in secured debt financing, which was intended to retire ATEC’s existing credit facilities and fund the cash required to complete the acquisition of EOS. The Company’s current credit facilities with MidCap Funding IV, LLC and Squadron Medical Finance Solutions, LLC (“Squadron”) remain in place.
 
“We continue to believe that there is tremendous strategic value in an ongoing relationship between ATEC and EOS, which could enable growth acceleration for both companies,” said Sam Chawla, Portfolio Manager, Perceptive Advisors. “Our confidence in ATEC and its management team remains strong, and we look forward to future opportunities to provide our support.”