Alphatec today said it terminated a tender offer agreement with EOS Imaging.
Carlsbad, Calif.-based Alphatec announced on Feb. 26 that it would acquire EOS Imaging for up to $88 million, plus debt retirement of $33.9 million in a combination of cash and equity.
The company retracted its agreement following an analysis of the ongoing market effects of the COVID-19 pandemic, according to Alphatec. The company cited “material adverse effect” has occurred due to the pandemic and has resulted in circumstances that aren’t conducive to completing the acquisition.
EOS Imaging said in a news release that it disagrees with Alphatec’s analysis and considers COVID-19 will have a short-term impact on business and does not impact the long term perspective of the company.
“This has been a difficult, disappointing decision,” Alphatec CEO Pat Miles said in a news release. “Both companies have worked so hard and so cooperatively, over many months, to bring this transaction together. On behalf of the entire ATEC family, I want to personally thank EOS for its commitment and hospitality throughout this process. It has been a thrill for me and other members of ATEC leadership to engage directly with so many of the talented EOS team members, and to see firsthand their prowess and passion for their work – attributes both our companies share. While the acquisition is no longer feasible as contemplated, I continue to believe that ATEC’s and EOS’s interests are best served through strategic collaboration. I have shared my belief with EOS leadership, and look forward to the opportunity to continue to explore ways that our companies can work together to bring informed operative experiences to the spine.”
Along with the termination of the tender offer agreement, Alphatec and Perceptive Credit Holdings have agreed to terminate the commitment letter for up to $160 million in secured debt financing that was set to retire the company’s existing credit facility and complete the acquisition.
“We continue to believe that there is tremendous strategic value in an ongoing relationship between ATEC and EOS, which could enable growth acceleration for both companies,” said Sam Chawla, Portfolio Manager, Perceptive Advisors. “Our confidence in ATEC and its management team remains strong, and we look forward to future opportunities to provide our support.”