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--Transaction Will Bring Innovative Technologies, High Growth, and Strong Gross Margins
Tornier N.V. (TRNX), a global medical device company focused on
providing surgical solutions to orthopaedic extremity specialists, today
announced that it has signed a definitive agreement to acquire
OrthoHelix Surgical Designs, Inc. for $135 million plus additional
payments over two years, which will be based on achieving certain
revenue growth milestones.
OrthoHelix is an innovative, high growth, and EBITDA positive company
that is focused on developing and marketing specialty implantable screw
and plate systems for the repair of small bone fractures and deformities
predominantly in the foot and ankle. OrthoHelix’s sales for the calendar
year 2012, which are all based in the United States, are projected to
reach approximately $29 million, an increase of over 30% compared to
2011. OrthoHelix’s gross profit margin on 2012 sales is expected to
exceed 80% and EBITDA is expected to be positive. The addition of
OrthoHelix is expected to more than double Tornier’s lower extremity
revenue and allow Tornier to increase its focus on foot and ankle
surgeons.
Douglas W. Kohrs, President and Chief Executive Officer of Tornier,
commented, "We are pleased to welcome the employees, surgeon advisors,
and distribution partners of OrthoHelix to Tornier. OrthoHelix’s
innovative technology, products, and surgeon focused culture will help
us take our Specialists Serving Specialists strategy to the next
level. The transaction will enable us to substantially expand our sales
coverage of foot and ankle surgeons, significantly enhance our
addressable lower extremity market opportunity, and position us to
achieve more consistent growth across our upper and lower extremity
product categories."
OrthoHelix’s strong growth is led by its MaxLock Extreme(R) small
bone screw and plate systems featuring proprietary anatomic contouring,
low profile, and multiplanar fixation. The combination of OrthoHelix’s
broad line of plate and screw systems with Tornier’s ankle arthroplasty,
biologics, and other foot and ankle implants is expected to create one
of the broadest product and technology offerings to lower extremity
surgical specialists in the orthopedic industry. In addition, Tornier
plans to utilize its strong international distribution channel to
accelerate OrthoHelix’s geographic expansion beyond its current sales
base in the United States.
Dennis Stripe, President and CEO of OrthoHelix, commented, "We are very
excited by the opportunities that the OrthoHelix and Tornier combination
will present to our surgeon customers and our employees. We believe
Tornier’s resources will position us to drive significant organic growth
in the lower extremity business through product innovation, access to
novel arthroplasty and biologic products, and, over time, an
international presence for OrthoHelix through Tornier’s strong proven
distribution network. We are confident that our strong "Surgeons
Speak. We Deliver" culture will only be enhanced as part of Tornier."
Under the terms of the agreement, Tornier has agreed to acquire
OrthoHelix for $135 million, which will consist of $100 million in cash
and $35 million in Tornier’s stock. Tornier intends to use cash on hand
and borrowings to pay for the acquisition. Upon closing, the transaction
is expected to be dilutive to Tornier’s 2013 earnings per share,
excluding amortization and stock compensation expense, and acquisition
and integration related charges, or cash earnings per share, but
accretive to its cash earnings per share in 2014.
OrthoHelix will continue to operate under the OrthoHelix name, retain
all of its product brand names in the market, and customers will
continue to be served by OrthoHelix and their distribution partners.
Central operations of the OrthoHelix business will remain based in
Medina, Ohio as will its 80 dedicated employees.
Outlook
Excluding OrthoHelix acquisition and integration related charges,
Tornier is reiterating its previously issued standalone financial
guidance for fiscal 2012 and third quarter, which is contained in
Tornier’s earnings release issued on August 7, 2012. Tornier expects to
issue combined fiscal 2012 guidance reflecting the acquisition of
OrthoHelix at the appropriate time once the transaction is closed.
OrthoHelix Acquisition Conference Call Information
Tornier will host a conference call today at 8:00 a.m. eastern time to
discuss its agreement to acquire OrthoHelix. The call will be broadcast
live over the Internet and can be accessed on the Investor Relations
section of the Company’s website at www.Tornier.com.
Those without internet access may join the call from within the U.S. by
dialing 1-877-673-5355; and outside the U.S., by dialing +1-760-666-3805.
A telephone replay will be available for two weeks following the call by
dialing 1-855-859-2056 for domestic participants and +1-404-537-3406 for
international participants. When prompted, please enter the replay pin
number 24689595. For those who are not available to listen to the live
webcast, the call will be archived for one year on Tornier’s website.
Forward-Looking Statements
Statements contained in this release that relate to future, not past,
events are forward-looking statements under the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are based on
current expectations of future events and often can be identified by
words such as "expect," "should," "project," "anticipate," "intend,"
"plan," "will," "may," "believe," "could," "would," "continue,"
"outlook," "guidance," other words of similar meaning or the use of
future dates. Examples of forward-looking statements in this release
include Tornier’s financial guidance for the third quarter of 2012 and
for the full year 2012, the anticipated effect of the acquisition of
OrthoHelix on Tornier’s future revenues, earnings and other operating
results, the anticipated effect of the acquisition on Tornier’s lower
extremity market opportunity and focus, OrthoHelix’s projected 2012
sales, gross profit margin and EBITDA, Tornier’s intent to introduce
OrthoHelix’s products internationally, anticipated benefits of the
OrthoHelix acquisition, Tornier’s current plans with respect to
OrthoHelix and its products, operations and employees, and the market
potential and anticipated market acceptance of Tornier’s and
OrthoHelix’s products. Forward-looking statements by their nature
address matters that are, to different degrees, uncertain. Uncertainties
and risks may cause Tornier’s actual results to be materially different
than those expressed in or implied by Tornier’s forward-looking
statements. For Tornier, such uncertainties and risks include, among
others, delays in completing the acquisition of OrthoHelix and the risk
that the acquisition may not be completed at all; the anticipated
incurrence of additional indebtedness by Tornier to pay the cash portion
of the merger consideration; the failure by Tornier to obtain the
necessary debt financing arrangements to fund the acquisition; failure
to achieve the revenues, cost savings, earnings, growth prospects and
any or other benefits and synergies expected from the acquisition or
delays in realization thereof; delays and challenges in integrating the
businesses after the acquisition is completed; operating costs and
business disruption during the pendency of and following the
acquisition, including adverse effects on employee retention and on
business relationships with third parties, including physicians,
providers and distributors; Tornier’s future operating results and
financial performance; fluctuations in foreign currency exchange rates;
the effect of global economic conditions and the European sovereign debt
crisis; the timing of regulatory approvals and introduction of new
products; physician acceptance, endorsement, and use of new products;
the effect of regulatory actions, changes in and adoption of
reimbursement rates; potential product recalls; competitor activities
and the costs and effects of litigation and changes in tax and other
legislation. More detailed information on these and other factors that
could affect Tornier’s actual results are described in Tornier’s filings
with the U.S. Securities and Exchange Commission, including its most
recent annual report on Form 10-K and subsequent quarterly reports on
Form 10-Q. Tornier undertakes no obligation to update its
forward-looking statements.
About Tornier
Tornier is a global medical device company focused on serving
extremities specialists who treat orthopaedic conditions of the
shoulder, elbow, wrist, hand, ankle and foot. The Company’s broad
offering of over 90 product lines includes joint replacement, trauma,
sports medicine, and biologic products to treat the extremities, as well
as joint replacement products for the hip and knee in certain
international markets. Since its founding approximately 70 years ago,
Tornier’s "Specialists Serving Specialists" philosophy has fostered a
tradition of innovation, intense focus on surgeon education, and
commitment to advancement of orthopaedic technology stemming from its
close collaboration with orthopaedic surgeons and thought leaders
throughout the world. For more information regarding Tornier, visit www.tornier.com.
About OrthoHelix Surgical Designs, Inc.
OrthoHelix is a medical device company developing a comprehensive line
of implants and instruments for use in small bone reconstructive
surgery. OrthoHelix is dedicated to being the most responsive device
maker in the orthopedic industry while providing state of the art
extremity fixation products that are reliable and easy to use.
OrthoHelix’s vision is to be an orthopedic company that succeeds by
listening to surgeons and providing them what they require for safer,
faster, easier surgical procedures and improved patient outcomes.
OrthoHelix takes pride in upholding values of Integrity, Compliance,
Dedication, Focus and Speed. "Surgeons Speak. We Deliver."(R) www.orthohelix.com.
Use of Non-GAAP Financial Measures
Tornier is utilizing certain non-GAAP financial measures in its
discussion of its proposed acquisition of OrthoHelix, including earnings
before interest, taxes, depreciation and amortization (EBITDA), cash
earnings per share (EPS), and adjusted EPS. Non-GAAP financial measures
have limitations as analytical tools and should not be considered in
isolation or as a substitute for financial results prepared in
accordance with GAAP.
SOURCE: Tornier N.V.
Tornier N.V.
Doug Kohrs
President and Chief Executive Officer
952-426-7606
dkohrs@tornier.com
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