OrthoPediatrics Sells Off Vilex Adult Business

OrthoPediatrics Corp. a company focused exclusively on advancing the field of pediatric orthopedics, today announced that it has completed the sale of substantially all of the assets related to the adult product offering of Vilex in Tennessee, Inc. (“Vilex Adult Business”) to Vilex LLC (“Buyer”), an affiliate of Squadron Capital LLC (“Squadron Capital”). In addition, Buyer was granted a license to manufacture and sell products utilizing the external fixation technology developed by Orthex, LLC, an affiliate of OrthoPediatrics, subject to certain restrictions in favor of OrthoPediatrics on sales to certain pediatric accounts. The divestiture was completed on December 31, 2019.
 
OrthoPediatrics had previously reported its plan to divest the Vilex Adult Business when it acquired Vilex in Tennessee, Inc. and Orthex, LLC in June 2019. As consideration for the Vilex Adult Business, the amount owed by OrthoPediatrics under its Term Note B payable to Squadron Capital was reduced by $25 million. OrthoPediatrics also received the right to use and sell certain intellectual property that Buyer acquired as part of the Vilex Adult Business.
 
The remaining $5 million of principal outstanding under the Term Note B, plus all accrued interest, was repaid by OrthoPediatrics in full, on December 31, 2019, with funds received from its revolving credit facility with Squadron Capital.
 
Mark Throdahl, president and CEO of OrthoPediatrics, commented, “We were encouraged with the high level of interest we received for the Vilex Adult Business during a competitive bidding process last fall. Squadron’s highest bid, together with their help financing the acquisition last June, demonstrates Squadron’s continuous support that has contributed to our on-going success. This divestiture also demonstrates our ability to execute on our strategic objective of positioning OrthoPediatrics for sustainable future growth and maintaining our leading position in pediatric orthopedics.”
 
David Pelizzon, president of Squadron Capital, added, “Vilex’s adult assets and extensive research and development pipeline provide a noteworthy investment opportunity for us. We are excited to be able to offer their compelling technology and strategically focus on developing a commercial strategy to grow the adult business. We appreciate OrthoPediatrics’ dedication to pediatrics and look forward to increasing adoption of the technology for adult patients.”
 
Stifel served as the exclusive financial advisor and Bingham Greenebaum Doll LLP served as the exclusive legal advisor to OrthoPediatrics.