Michael Barbella, Managing Editor06.23.22
Bioventus Inc. is amending its pending CartiHeal purchase agreement to ease the financial burden on both the company and its stockholders.
“CartiHeal represents an important breakthrough for the treatment of osteoarthritis and osteochondral defects of the knee with significant long-term potential, and we are excited to have reached an amendment that we believe will be favorable to our stakeholders and enable us to complete the acquisition,” Bioventus CEO Ken Reali said. “The ability to defer a significant portion of the upfront cash consideration allows us to continue investing in our near-term strategy for growth while maintaining financial flexibility. Bioventus possesses multiple short- and mid-term growth drivers that are further enhanced by CartiHeal, and we continue to work towards realizing the potential of our portfolio to deliver sustained double-digit growth and margin expansion.”
The amended acquisition agreement reduces Bioventus' closing payment to $50 million (in addition to $50 million deposited into escrow last year) from the original $315 million that was previously agreed. The remaining $215 million of the purchase price (the deferred amount) will instead be paid to CartiHeal stockholders upon the earlier achievement of certain milestones or on certain installment payment dates. The deferred amount will be paid in five tranches commencing in 2023 and ending no later than 2027.
Bioventus will pay interest on each tranche of the deferred amount at 8% annually until the tranche is paid. Additionally, the $135 million owed to CartiHeal stockholders upon achieving $100 million in trailing 12-month sales will now be payable upon achieving $75 million in trailing 12-month sales.
Bioventus expects to close the acquisition by the end of July 2022, subject to closing conditions, with a $108 million up-front payment to CartiHeal’s stockholders (inclusive of the $50 million previously deposited into escrow by Bioventus and in addition to approximately $8 million of CartiHeal’s transaction-related fees and expenses that Bioventus has agreed to pay). The company will finance the payment due at closing with additional debt. Bioventus is finalizing an amendment to its existing Credit and Guaranty Agreement to increase its current term loan to facilitate the deal's closing. Deferred amount payments are anticipated to be made through the company’s free cash flow and expansion of its existing credit facility.
Bioventus delivers products that help people heal quickly and safely. The Innovations for Active Healing from Bioventus include offerings for pain treatment, restorative therapies, and surgical solutions.
“CartiHeal represents an important breakthrough for the treatment of osteoarthritis and osteochondral defects of the knee with significant long-term potential, and we are excited to have reached an amendment that we believe will be favorable to our stakeholders and enable us to complete the acquisition,” Bioventus CEO Ken Reali said. “The ability to defer a significant portion of the upfront cash consideration allows us to continue investing in our near-term strategy for growth while maintaining financial flexibility. Bioventus possesses multiple short- and mid-term growth drivers that are further enhanced by CartiHeal, and we continue to work towards realizing the potential of our portfolio to deliver sustained double-digit growth and margin expansion.”
The amended acquisition agreement reduces Bioventus' closing payment to $50 million (in addition to $50 million deposited into escrow last year) from the original $315 million that was previously agreed. The remaining $215 million of the purchase price (the deferred amount) will instead be paid to CartiHeal stockholders upon the earlier achievement of certain milestones or on certain installment payment dates. The deferred amount will be paid in five tranches commencing in 2023 and ending no later than 2027.
Bioventus will pay interest on each tranche of the deferred amount at 8% annually until the tranche is paid. Additionally, the $135 million owed to CartiHeal stockholders upon achieving $100 million in trailing 12-month sales will now be payable upon achieving $75 million in trailing 12-month sales.
Bioventus expects to close the acquisition by the end of July 2022, subject to closing conditions, with a $108 million up-front payment to CartiHeal’s stockholders (inclusive of the $50 million previously deposited into escrow by Bioventus and in addition to approximately $8 million of CartiHeal’s transaction-related fees and expenses that Bioventus has agreed to pay). The company will finance the payment due at closing with additional debt. Bioventus is finalizing an amendment to its existing Credit and Guaranty Agreement to increase its current term loan to facilitate the deal's closing. Deferred amount payments are anticipated to be made through the company’s free cash flow and expansion of its existing credit facility.
Bioventus delivers products that help people heal quickly and safely. The Innovations for Active Healing from Bioventus include offerings for pain treatment, restorative therapies, and surgical solutions.
