GlobeNewswire12.17.20
Alphatec Holdings Inc., a medical device company dedicated to revolutionizing the approach to spine surgery, announced today that it has entered into an agreement to acquire EOS imaging, SA, for a purchase price of $79.7 million, plus the retirement debt of $37.2 million, in an all-cash transaction.
“SafeOp has substantiated the value of clinically actionable information by accelerating product adoption across our portfolio,” said Pat Miles, Chairman and CEO. “Our original investment thesis for EOS as a solution to better inform surgery never changed. With this transaction, we take another major step toward distinguishing ATEC clinical performance with improved information from diagnosis through follow-up.”
EOS imaging is globally recognized for its rapid, low dose, biplanar full-body imaging and 3D modeling capabilities. EOS technology informs the entire surgical process by capturing a calibrated, full-body image in a standing (weight-bearing) position, enabling precise measurement of anatomical angles and dimensions. The resulting imaging drives a more accurate understanding of patient alignment during diagnosis, characterizes bone quality, elevates the likelihood of surgical goal fulfillment by integrating a fully informed plan into surgery, and supports a post-operative assessment against the original surgical plan.
Growth Through the Monetization of Improved Outcomes
Uniting ATEC’s AlphaInformatiX platform with EOS’ technology will create a platform distinctively equipped to address the requirements of spine surgery.
“EOS is a game-changing technology that has unquestionably improved the treatment of children, adolescents and adults with spinal deformity,” commented Dr. Chris Shaffrey of Duke Spine Center in North Carolina.
“ATEC Spine and EOS both believe in the power of information to improve surgical outcomes,” said Mike Lobinsky, CEO of EOS imaging. “We are pleased to revisit this transaction and eager to combine the strengths and know-how of our organizations. I am confident that we will quickly create a highly differentiated, end-to-end informational offering that will accelerate growth in the U.S. and pave the way for the future global growth of our combined entity.”
Transaction Terms
Once closed, the transaction is expected to immediately expand ATEC’s revenue base through the addition of EOS’s revenue run rate and the monetization of information through incremental pull-through and cross-selling opportunities. The Company expects the acquisition to be accretive to revenue, revenue growth, adjusted EBITDA and free cash flow in the first full year of operations following the transaction close.
The Boards of Directors of both ATEC and EOS have approved the execution of a tender offer agreement (the "Tender Offer Agreement"), through which ATEC will launch a cash tender offer for all of the issued and outstanding shares and convertible notes of EOS imaging for a total purchase price of $116.9 million (the “Offer”).
Under the terms of the Offer, EOS' shareholders would receive EUR €2.45 (or approximately USD $2.99) per EOS share, representing a premium of 41 percent to the closing price of EOS shares on December 16, 2020.
Holders of approximately 23 percent of EOS’ outstanding common shares have entered into agreements to tender into the Offer for cash, representing approximately EUR €15.1 million (or approximately USD $18.4 million) of the total purchase price.
The Offer will also target all outstanding EOS convertible notes (“EOS OCEANE”, or the “Notes”). The holders of the Notes would receive either EUR €7.01 (or approximately USD $8.55) per EOS OCEANE (including interest due through May 31, 2021).
The Company expects to file the Offer with the French Financial Markets Authority (Autorité des marches financiers) (“AMF”) in February 2021. The transaction is expected to close in the second quarter of 2021, subject to customary closing conditions, including obtaining French regulatory clearance regarding foreign investments and a favorable opinion of the EOS board of directors based on the fairness opinion issued by the independent expert appointed by EOS.
References
1 Yeh, Kuang-Ting MD, PhD; Lee, Ru-Ping RN, PhD; Chen, Ing-Ho MD; Yu, Tzai-Chiu MD; Liu, Kuan-Lin MD, PhD; Peng, Cheng-Huan MD, Wang, Jen-Hung MD; Wu, Wen-Tien MD, PhD. October 2018. Correlation of Functional Outcomes and Sagittal Alignment After Long Instrumented Fusion for Degenerative Thoracolumbar Spinal Disease. Spine: Volume 43, Issue 19.
“SafeOp has substantiated the value of clinically actionable information by accelerating product adoption across our portfolio,” said Pat Miles, Chairman and CEO. “Our original investment thesis for EOS as a solution to better inform surgery never changed. With this transaction, we take another major step toward distinguishing ATEC clinical performance with improved information from diagnosis through follow-up.”
EOS imaging is globally recognized for its rapid, low dose, biplanar full-body imaging and 3D modeling capabilities. EOS technology informs the entire surgical process by capturing a calibrated, full-body image in a standing (weight-bearing) position, enabling precise measurement of anatomical angles and dimensions. The resulting imaging drives a more accurate understanding of patient alignment during diagnosis, characterizes bone quality, elevates the likelihood of surgical goal fulfillment by integrating a fully informed plan into surgery, and supports a post-operative assessment against the original surgical plan.
Growth Through the Monetization of Improved Outcomes
Uniting ATEC’s AlphaInformatiX platform with EOS’ technology will create a platform distinctively equipped to address the requirements of spine surgery.
- Reduces cost to serve with precise pre-surgical planning that significantly improves inventory efficiency;
- Facilitates patient-specific implants and expands optionality with distinctive bone quality measurements that can improve treatment effectiveness;
- Informs the restoration of alignment with a scientific, objective, data-driven approach to meet a crucial, unmet need in spine that is most correlated with long-term successful outcomes;1
- Expands ATEC’s academic reach through EOS’ wealth of installations in research institutions and influence shaped by over 500 peer-reviewed scientific articles and endorsement by thought leaders worldwide;
- Provides immediate access to EOS’ 380-unit installed base and expedites ATEC’s future ability to enter and penetrate key international markets.
“EOS is a game-changing technology that has unquestionably improved the treatment of children, adolescents and adults with spinal deformity,” commented Dr. Chris Shaffrey of Duke Spine Center in North Carolina.
“ATEC Spine and EOS both believe in the power of information to improve surgical outcomes,” said Mike Lobinsky, CEO of EOS imaging. “We are pleased to revisit this transaction and eager to combine the strengths and know-how of our organizations. I am confident that we will quickly create a highly differentiated, end-to-end informational offering that will accelerate growth in the U.S. and pave the way for the future global growth of our combined entity.”
Transaction Terms
Once closed, the transaction is expected to immediately expand ATEC’s revenue base through the addition of EOS’s revenue run rate and the monetization of information through incremental pull-through and cross-selling opportunities. The Company expects the acquisition to be accretive to revenue, revenue growth, adjusted EBITDA and free cash flow in the first full year of operations following the transaction close.
The Boards of Directors of both ATEC and EOS have approved the execution of a tender offer agreement (the "Tender Offer Agreement"), through which ATEC will launch a cash tender offer for all of the issued and outstanding shares and convertible notes of EOS imaging for a total purchase price of $116.9 million (the “Offer”).
Under the terms of the Offer, EOS' shareholders would receive EUR €2.45 (or approximately USD $2.99) per EOS share, representing a premium of 41 percent to the closing price of EOS shares on December 16, 2020.
Holders of approximately 23 percent of EOS’ outstanding common shares have entered into agreements to tender into the Offer for cash, representing approximately EUR €15.1 million (or approximately USD $18.4 million) of the total purchase price.
The Offer will also target all outstanding EOS convertible notes (“EOS OCEANE”, or the “Notes”). The holders of the Notes would receive either EUR €7.01 (or approximately USD $8.55) per EOS OCEANE (including interest due through May 31, 2021).
The Company expects to file the Offer with the French Financial Markets Authority (Autorité des marches financiers) (“AMF”) in February 2021. The transaction is expected to close in the second quarter of 2021, subject to customary closing conditions, including obtaining French regulatory clearance regarding foreign investments and a favorable opinion of the EOS board of directors based on the fairness opinion issued by the independent expert appointed by EOS.
References
1 Yeh, Kuang-Ting MD, PhD; Lee, Ru-Ping RN, PhD; Chen, Ing-Ho MD; Yu, Tzai-Chiu MD; Liu, Kuan-Lin MD, PhD; Peng, Cheng-Huan MD, Wang, Jen-Hung MD; Wu, Wen-Tien MD, PhD. October 2018. Correlation of Functional Outcomes and Sagittal Alignment After Long Instrumented Fusion for Degenerative Thoracolumbar Spinal Disease. Spine: Volume 43, Issue 19.