Orthofix International is selling its Sports Medicine Business Unit, which operates as Breg, Inc, to Water Street Healthcare Partners for USD157.5 million.
The deal is expected to close during Q2 2012.
Net proceeds to Orthofix from the sale are anticipated to be approximately USD140 million, which will be used for the prepayment of debt as required by Orthofix’s existing credit agreement.
The Company acquired its Sports Medicine business in 2003 with the purchase of Breg, which is headquartered in Carlsbad, CA. The Sports Medicine business provides a portfolio of bracing and cold therapy products to treat a variety of sports medicine related conditions.
“With the divestiture of the Sports Medicine business, we are now able to devote Orthofix’s full resources and attention to strengthening our value proposition around our repair hardware and regenerative biologics and stimulation solutions,” says Robert Vaters, President and Chief Executive Officer. "We believe this deleveraging event and resulting borrowing capacity will allow us to expand and enhance both our Spine and Orthopedic business units in a way that accelerates our ability to create shareholder value.”
“We are pleased that Orthofix has entrusted Water Street to grow Breg. We see tremendous opportunity to build on Breg’s leadership position and create greater long-term value in the organisation. We will leverage our team’s deep medical products knowledge, extensive operating experience and network of relationships to strategically expand Breg’s innovative products and global presence,” says Chris Sweeney, partner, Water Street.
Upon closing, the Company will file the required pro forma financial results reflecting the disposition following the consummation of the sale transaction with the Securities and Exchange Commission, including any impact of pre-closing liabilities the Company will retain. JP Morgan Securities LLC provided a fairness opinion to the board of directors related to the transaction.
