Orthofix (NSDQ:OFIX) agreed to sell all outstanding shares of its sports medicine subsidiary Breg Inc. to Breg Acquisition Corp., a newly formed subsidiary of private equity firm Water Street Healthcare Partners, for $157.5 million in cash.

Orthofix expects to net about $140 million from the transaction, which it will use to prepay certain debt agreements, according to a press release.

"With the divestiture of the sports medicine business, we are now able to devote Orthofix’s full resources and attention to strengthening our value proposition around our repair hardware and regenerative biologics and stimulation solutions," president & CEO Robert Vaters said in prepared remarks.

"We believe this deleveraging event and resulting borrowing capacity will allow us to expand and enhance both our spine and orthopedic business units in a way that accelerates our ability to create shareholder value," he added.

The price tag is subject to change depending on Breg Inc.’s closing capital and indebtedness at the time the deal closes, according to regulatory filings.

The news made waves on Wall Street, where OFIX shares were up 3.6% to $37.66 as of about 10:45 a.m. this morning.

Carlsbad, Calif.-based Breg Inc. is currently mired in a clutch of patient injury lawsuits alleging that its Breg pain pumps left patients with injuries.

The company recently declared victory in the 1st of the series of lawsuits to make it to trial when a jury deemed Breg blameless of charges that it manufactured and sold a pump found to be defective and unreasonably dangerous.

While the decision doesn’t carry over to any other complaints, the win is encouraging.

"I think it means Breg will stand behind its product and defend its product," Bowman & Brooke lawyer George Soule told MassDevice in August. "Hopefully it’ll be a harbinger of things to come."