Integra LifeSciences (NSDQ:IART) said today that it plans to spin out its spine business as a stand-alone public company under the SeaSpine brand so it can focus on its surgical solutions, orthopedics and tissue technology businesses.
Integra acquired Vista, Calif.-based SeaSpine for $89 million in 2011, doubling its distribution footprint and customer base in the U.S. spine market. SeaSpine co-founder and former CEO Kirt Stephenson is in line to be named chairman of the company’s latest iteration and a search for a CEO is under way, according to a press release.
"These strategic changes create a much stronger platform for organic growth and execution, and we believe both companies will grow faster separately than together," president & CEO Peter Arduini said in prepared remarks. "Moving forward, Integra will have a simpler, more focused structure from which to operate, which should improve our ability to achieve our longer-term growth and margin improvement objectives. Further, we believe these moves create exciting opportunities for our shareholders and both organizations."
The spinout is expected to close within the next 12 months, according to the release, in the form of a tax-free distribution to Integra shareholders. Integra said it will create a new specialty surgical solutions business to leverage its existing neurosurgery and instruments operations.
"I’m excited about the opportunity to create another company focused on growth through new product development, strategic acquisitions and partnerships," chairman Stuart Essig said in a statement. "As a public company, SeaSpine will have a host of options to accelerate its growth and effectively invest in new business opportunities. The board believes this will be achieved more fully as a stand-alone public company rather than through a strategic merger or divestiture of the business. Further, Rich Caruso, Integra’s founder, and I personally look forward to remaining shareholders of both great companies."
"These proposed changes represent a continued focus on optimizing and accelerating growth," Arduini added. "We are excited about the opportunities for both companies and will provide updates on an ongoing basis as the transaction unfolds."
In a separate announcement, Integra said it swung to 3rd-quarter black on a 7.7% top-line increase. The Plainsboro, N.J.-based company posted profits of $9.8 million, or 30¢ per share, on sales of $229.7 million for the 3 months ended Sept. 30, compared with losses of -$30.3 million during the same period last year.
Adjusted to exclude 1-time items, profits were $25.1 million, or 76¢ per share, 2¢ ahead of expectations on Wall Street.
IART shares closed up 0.7% today at $51.49 apiece.