Wright Medical (NSDQ:WMGI) said yesterday that it was hit with a double whammy from U.S. regulators, after the Federal Trade Commission asked for more details on its pending merger with Tornier (NSDQ:TRNX) and the FDA hit a plant where its Augment bone putty is made with a "Form 483" warning.
Memphis-based Wright said the FTC sent it a formal 2nd request Jan. 28, seeking more information on the Tornier deal, a $3.3 billion merger of equals announced last October. The FTC request extends the waiting period on the deal until 30 days after the request is met, unless extended by Tornier or Wright or closed early by the anti-trust watchdog.
Earlier this month the companies voluntarily extended the waiting period to give the FTC more time to study the deal. Wright said the 2nd request means the expected 2nd-quarter closing is now a best-case scenario. The request concerns the effect of combining the firms’ lower extremities businesses, according to a regulatory filing; Tornier’s U.S. lower extremity sales were $14.9 million for the period ended Sept. 30, according to the filing.
"We just received the 2nd request and are evaluating our options. We will continue to work cooperatively with the FTC to resolve this as quickly as possible. Whatever the final resolution, we do not expect it to have a material impact on the strategic rationale or economics of the proposed merger, and we remain firmly committed to the transaction," Wright president & CEO Robert Palmisano said in prepared remarks.
Wright also said that an FDA inspection conducted as part of a review of its Augment bone graft putty prompted a Form 483 warning, according to a separate filing.
"The vendor has submitted a full response to FDA that the vendor and the company believe will satisfactorily address the FDA’s observations. Based on this, Wright continues to anticipate final approval of Augment bone graft in the 1st half of 2015 but believes a 1st quarter approval is unlikely," the company said.
Post-merger leadership revealed
Wright and Tornier last week released their post-merger management roster, which calls for Palmisano to assume the same posts at the new company. Palmisano, who was named Wright’s CEO in 2011, will also serve as a director.
Tornier CEO Dave Mowry will serve as the new company’s chief operating officer and take a seat on the board.
Wright CFO Lance Berry and General Counsel James Lightman will remain in their respective positions. Other Wright executives slated to stay include Robert Burrows, as senior vice president for supply chain; Wes Porter, as chief compliance officer; Julie Tracy, as chief communications officer; and Jennifer Walker, as senior vice president for process improvement.
Tornier’s senior vice president for human resources, Greg Morrison, will assume the same role at the new company.
Wright also named 4 division heads, who will directly report to Mowry. They include Tornier’s Terry Rich, who will lead the upper extremities division; Wright’s Kevin Cordell, who will continue on as president of lower extremities & biologics; Wright’s Peter Cooke, who will oversee the company’s international business; and Wright’s William Griffin, who will remain as general manager of BioMimetic.
Val Kennedy contributed to this report.
