MiMedx (NSDQ:MDXG) said it completed its acquisition of human tissue product provider Stability Biologics, paying $10 million at closing and saying it expected the buy to be accretive to its full year 2016 adjusted EPS.
Nashville, Tenn.-based Stability Biologics produces tissue products at its national processing center in San Antonio, Texas, for use in surgical, spinal and orthopedic sectors, the company said.
“We are pleased to have Stability Biologics join us, and we look forward to welcoming all of their associates to MiMedx. We also look forward to welcoming Brian Martin, their CEO, and Tom Johnston, their president, to the MiMedx senior executive team. Brian and Tom were the founders of Stability Biologics, and they have developed an outstanding reputation and tremendous relationships within the surgical, spine and orthopedics sectors of healthcare. We are pleased that they will be joining MiMedx, and we will greatly benefit from their expertise and extensive experience. Brian and Tom, along with the Stability Biologics leadership team of co-founder Martin P. Hall Jr., their executive director; Dr. Erik Erbe, chief science officer; David Dorsey, vice president; Rusty Adams, vice president of quality systems and regulatory affairs; Brent Smith, executive vice president; and Scott Walsh, vice president of production will become members of our management team,” MiMedx CEO Parker Petit said in an SEC filing.
Stability Biologics will continue to operate as a subsidiary of MiMedx. The company has developed a proprietary platform for bioactive bone graft products and tissue allografts.
The company’s most recent product is the Physio bone grafting material comprised of 100% bone tissue, MiMedx said.
MiMedx did not offer adjusted guidance after the buy, but expects revenue from Stability Biologics to be at least $15 million, according to the SEC filing. The company also commented that its $10 million closing payment was comprised of 60% cash and 40% stock.
“We are excited about the potential benefits both organizations will gain from this transaction. Stability Biologics brings us the ideal combination of HCT/P products, intellectual property, sales and distribution and employee talents in a strategic market sector with great growth potential. Their products should also strengthen and complement the sales of the MiMedx tissue products. We believe MiMedx brings to Stability Biologics a parent organization with the operating efficiencies, infrastructure, capitalization, strategic direction and vision to dramatically propel its growth opportunities. Stability Biologics is also at the point in their growth where they needed a broader business foundation in the clinical, scientific, reimbursement and contracts areas. These are critical competencies of MiMedx that will accelerate the Stability Biologics growth potential. We believe this is a timely union,” MiMedx prez Bill Taylor said in a prepared statement.
