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Orthopedic and Dental Industry News Complete Archive »

Wright Medical to Acquire BioMimetic Therapeutics BY ANDREW VAHRADIAN, NOVEMBER 19, 2012

Wright Medical announced that it reached an agreement with BioMimetic Therapeutics to combine the businesses, in which it will potentially pay up to $380 million, or $12.97 per share, for BioMimetic in cash and stock, implying a premium range of 55.9% - 212.5% to BioMimetics closing share price of $4.15 on November 16, 2012.

Under the terms of the agreement, Wright Medical will make an upfront payment of $1.50 in cash and 0.2482 shares of Wright common stock, based on Wright’s closing stock price on November 16, 2012, for each share of BioMimetic, valuing BioMimetic at approximately $190 million, or $6.47 per share.

Each BioMimetic share also receives one tradable Contingent Value Right (CVR), entitling its holder to receive additional cash payments of up to $6.50 per share, $3.50 of which, will be payable upon receipt of FDA approval of Augment Bone Graft, and $1.50 upon achieving trailing twelve month (TTM) revenue milestones of $40 million and $70 million.

This transaction further demonstrates the plan of Wright's new management team to transform Wright Medical as a pure-play extremities company. BioMimetic’s products complement Wright's existing biologics product portfolio, and, if approved by the FDA, its Augment Bone Graft (ABG) will provide Wright with a unique solution for the U.S. hindfoot and ankle fusion market, altogether accelerating Wright's strategy of growing its foot & ankle business and building its biologics platform. BioMimetic's ABG will also give Wright Medical the ability to compete at the high-end of the biologics market with Medtronic's Infuse.

Wright anticipates the transaction to be dilutive to adjusted EBITDA until the second full-year post-FDA approval of ABG and accretive thereafter.

The transaction received unanimous approval of the board of directors of both Wright Medical and BioMimetic and is expected to close 1Q:13. JP Morgan and Goldman Sachs acted as the financial advisors to Wright Medical and BioMimetics respectively.

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