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Orthopedic and Dental Industry News Complete Archive »

Tactile Systems Priced IPO BY ANDREW VAHRADIAN, AUGUST 22, 2016

Tactile Systems priced its initial public offering (IPO), by offering 4.0 million shares of common stock at a price of $10 a share, raising total proceeds of $40 million. This equates to an enterprise value of approximately $177 million, valuing the company at 2.7x LTM revenues, or 41.0x LTM EBITDA.

The final terms came in below its initial proposed price range of $14 to $16 and the initial offering size of $86.3 million and its amended offering size of $46.0 million.

The company intends to use the proceeds to expand sales and marketing, clinical and research and product development initiatives, pay down accrued dividends to the company's Series A preferred stockholders, working capital and general corporate purposes, and to potentially to acquire or invest in complementary products, technologies or businesses.

Tactile Systems develops pneumatic compression devices for the treatment of chronic vascular diseases such as lymphedema, blockage of one's lymphatic system which causes swelling of one's arms or legs, and venous leg ulcers in the home setting. The company has commercialized three systems: Flexitouch, ACTitouch and Entré.

For the 2015 fiscal year, Tactile Systems reported total revenue of $62.9 million, representing an increase of 32% on a reported basis compared to $47.7 in 2014. Gross margin decreased to 73.1% in 2015 from 73.4% in 2014. As of March 31, 2016, Tactile Systems' LTM revenue and EBITDA was $66.5 million and $4.3 million respectively.

The company listed on the NASDAQ Global Market (NasdaqGM) under the ticker symbol "TCMD". Piper Jaffray, William Blair and Canaccord acted as Lead Bookrunners on the deal, while BTIG served as a Co-manager.

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