Alphatec Holdings Completes Sale of International Business to Globus Medical
01 Septembre 2016 - 10:23PM
Alphatec Holdings, Inc. (Nasdaq:ATEC), the parent company of
Alphatec Spine, Inc., a provider of spinal fusion technologies,
today announced the completion of the previously announced sale of
its international operations and distribution channel to Globus
Medical (NYSE:GMED), a leading musculoskeletal implant
manufacturer.
With the closing of the transaction, the Company is now focused
solely on the U.S. market, which Alphatec believes constitutes
nearly 65% of the world's spinal fusion market.
Over the past several years, the Company has focused its R&D
programs and invested in the development of a leading, robust suite
of products that are available to surgeons in the U.S.
today—including Arsenal™ Degenerative, Arsenal Deformity and
Battalion™ Universal Interbody. In addition, the Company has
recently obtained U.S. clearance for its new XYcor® Expandable
Spinal Spacer System, which the Company plans to launch later this
year. The Company also made significant progress through its
initiative to outsource its manufacturing operations—reducing
capital investment in equipment, partnering with valued suppliers
to provide flexible capacity, while achieving unit level cost
reductions and margin improvements. As a result, Alphatec believes
it is now better positioned to compete more effectively in the
marketplace, accelerate growth and continue to improve
profitability.
“Today marks the beginning of a new chapter for Alphatec,” said
Jim Corbett, President and Chief Executive Officer of Alphatec
Spine. “I am excited about the long-term prospects for the company
as we pursue the U.S. spinal market with the resources we need to
support continued investment in the commercialization of our robust
product line. We have the right products, an exceptional team and a
newly streamlined balance sheet to support our growth across the
country, and we look forward to executing on our vision.”
Terms of the Transaction
Globus acquired Alphatec's international operations and
distribution channel for a purchase price of $80 million in cash.
Globus will also provide Alphatec a five-year senior secured credit
facility of up to $30 million. In addition, Alphatec has entered
into a supply agreement through which Alphatec will supply its
products to Globus for up to five years.
New Capital Structure
With the closing of this transaction, Alphatec believes that it
can now establish a new capital structure that appropriately
reflects the capital needs of its U.S.-focused business and
positions the company for achieving future profitability. As part
of the closing, Alphatec implemented the following related to this
new capital structure:
- Drew down $25M of the $30M credit facility from Globus upon
closing;
- Paid off the existing Deerfield credit facility balance and
retired the credit facility;
- Reduced the MidCap Financial term loan to a $5M balance;
and
- Reduced the MidCap Financial revolver commitment to
$22.5M.
With this, Alphatec expects to have paid down approximately $66
million of existing debt and debt-related expenses.
Concurrent with this transaction, Deerfield Management Company,
L.P. has utilized its cashless exercise provision under its warrant
agreements, converting its warrants to purchase up to 11.45 million
shares of common stock to approximately 3.2 million shares on a
pre-reverse split basis. This will constitute approximately 269
thousand shares on a post-reverse split basis. As a reminder,
on August 25, 2016 the Company completed a one-for-twelve reverse
stock split.
“As a result of this transaction, we are able to improve
Alphatec’s forward-looking balance sheet by reducing our overall
debt while providing the liquidity and reserves needed to invest in
commercializing our robust product portfolio,” said Mike O’Neill,
Alphatec’s Chief Financial Officer. “The new term loan from
Globus, in conjunction with a planned revolving line of credit from
MidCap Financial, provides the company with credit facilities of up
to $57.5 million, which will offer sufficient liquidity and
appropriate financing to successfully support Alphatec's transition
to a U.S. market based company. Upon closing, we estimate our
total debt drawn will be approximately $45 million. I would like to
thank Deerfield who has been an excellent partner and we appreciate
the support that they have provided to the company through the
years. I am also pleased that MidCap will remain as a lender and
provide funding for the company going forward. I want to thank them
for their continued commitment and support to Alphatec.”
The Company expects that its stronger financial foundation
coupled with its strong product portfolio will support future
investments in its capital instrument base each year. These
investments will be used to drive the commercial expansion of its
new product lines, which are expected to contribute substantially
to its planned growth profile. In addition, the Company has already
made substantial headway towards its goal of reducing its operating
expenses by $20 million. The Company expects this to continue for
the remainder of 2016 and into 2017, translating to positive cash
flow and profitability in the back half of 2017.
About Alphatec Spine
Alphatec Spine, Inc., a wholly owned subsidiary of Alphatec
Holdings, Inc., is a global medical device company that designs,
develops, manufactures and markets spinal fusion technology
products and solutions for the treatment of spinal disorders
associated with disease and degeneration, congenital deformities
and trauma. The Company's mission is to improve lives by delivering
advancements in spinal fusion technologies. The Company and its
affiliates market products in the U.S. and internationally via a
direct sales force and independent distributors.
Additional information can be found at
www.alphatecspine.com.
About Globus Medical
Globus Medical, Inc. is a leading musculoskeletal implant
company based in Audubon, PA. The company was founded in 2003 by an
experienced team of professionals with a shared vision to create
products that enable surgeons to promote healing in patients with
musculoskeletal disorders. Additional information can be accessed
at www.globusmedical.com.
Forward Looking Statements
This press release may contain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995 that involve risks and uncertainty. Such statements are
based on management's current expectations and are subject to a
number of risks and uncertainties that could cause actual results
to differ materially from those described in the forward-looking
statements. The Company cautions you that there can be no
assurance that actual results or business conditions will not
differ materially from those projected or suggested in such
forward-looking statements as a result of various factors. Forward
looking statements include the references to the Company’s ability
to compete in the U.S. marketplace, accelerate growth and continue
to improve profitability, continued investment in the
commercialization of the U.S. product lines and in its capital
instrument base, expected capital re-structuring and expected
reductions in operating expenses and the timing and likelihood of
cash flow and profitability. The important factors that could cause
actual operating results to differ significantly from those
expressed or implied by such forward-looking statements include,
but are not limited to: the Company’s ability to execute on
its business plan and effectively compete in the U.S. marketplace;
the Company not realizing the full economic benefit from the
transaction, including as a result of indemnification claims under
the definitive purchase agreement and the retention by the Company
of certain liabilities associated with the international business;
the Company’s ability to meet its obligations under the supply
agreement and its credit facilities; the uncertainty of success in
developing new products or commercializing products currently in
the Company’s pipeline, including the products discussed in this
press release; the Company’s ability to successfully reduce and
control its costs, improve its margins and improve its
profitability; claims related to the Company’s intellectual
property; product liability exposure; and other risks detailed in
the Company’s public periodic filings with the U.S. Securities and
Exchange Commission. You are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the
date hereof, and the Company undertakes no obligation to revise or
update this report to reflect events or circumstances after the
date hereof. All forward-looking statements are qualified in their
entirety by this cautionary statement.
CONTACT: Investor/Media Contact:
Christine Zedelmayer
Investor Relations
Alphatec Spine, Inc.
(760) 494-6610
czedelmayer@alphatecspine.com
Alphatec (NASDAQ:ATEC)
Graphique Historique de l'Action
De Juil 2024 à Août 2024
Alphatec (NASDAQ:ATEC)
Graphique Historique de l'Action
De Août 2023 à Août 2024