Exactech has entered a court-supervised Chapter 11 bankruptcy restructuring process, initiating an asset sale supported by existing investors as a “stalking horse” bidder to address legal liabilities.
The restructuring includes an $85 million financing commitment to maintain operations during the process, allowing Exactech to continue its orthopedic device operations and partnerships with surgeons.
Exactech said operations will remain unaffected during the Chapter 11 bankruptcy process, ensuring that surgeons, patients, and employees will experience no disruptions. According to CEO and President Darin Johnson, the restructuring is designed to help the company through non-operating liabilities associated with knee and hip litigation from recalls between 2021 and 2022.
“Our team has delivered strong performance and positive growth in 2024, and we are confident in the trajectory of our business,” Johnson said in a news release. “However, despite the strength of the underlying business, we face unsustainable liabilities associated with knee and hip litigation related to the packaging recalls we voluntarily initiated between 2021 and 2022. We take our commitment to patient well-being very seriously and have provided substantial out-of-pocket patient reimbursements and surgeon support for related expenses. The process we are commencing today is intended to help us create a stronger foundation for long-term growth with an improved balance sheet and new capital as well as ensure that we can continue providing innovative, industry-leading implants for surgeons and their patients for years to come.”
The sale, pending approval from the United States Bankruptcy Court for the District of Delaware, is open to competing bids. Exactech has filed motions to ensure business continuity, including employee wage payments, benefits and ongoing R&D efforts. The restructuring is backed by a consortium of private equity firms with extensive medical device industry expertise.
“We have determined that a court-supervised sale is the best path forward for our stakeholders. Our investor group recognizes the strength of our team, our surgeon relationships and our product portfolio, and we look forward to working with them throughout this process. The investor group shares a commitment to Exactech’s goals and is excited about further opportunities to drive innovation and growth,” Johnson said.
