The cash-and-stock deal calls for Alachua, Fla.-based RTI to pay $100 million in cash and more than 10.7 million shares of its own stock worth $50 million, with the $150 million balance pegged to unspecified milestones in cash and stock. The stock shares are slated to be priced using the volume-weighted average closing price of RTIX shares over the five trading days prior to the deal’s closing, expected during the first quarter next year.
New York City-based Paradigm’s Coflex device won pre-market approval from the FDA in 2012.
“With Coflex, the Paradigm Spine team has created a differentiated implant that has a demonstrated track record of improving patient outcomes and addresses a critical and growing need in the spine surgery space,” RTI president & CEO Camille Farhat said in prepared remarks. “Our growth strategy in spine is to invest in differentiated products and build scale. Coflex is a differentiated product that we anticipate will reinforce customer retention, support portfolio pull-through and enhance our overall spine offering. Following the successful acquisition of Zyga earlier this year, and the numerous successes in our ongoing strategic transformation, we believe this transaction demonstrates our commitment to improving outcomes for more patients, unlocking additional growth opportunities and ultimately driving value for all stakeholders.”
“We have spent the last several years building Coflex into a therapy of choice for orthopedic spine surgeons and neurosurgeons. We believe the treatment is on the verge of accelerating growth as coverage from private payors and patient access begin to expand,” added Paradigm co-founder, chairman & CEO Marc Viscogliosi. “We are confident RTI is the ideal partner to help achieve our considerable growth potential and address a vital patient need in the U.S. market.”
RTI said it expects the deal to add to its EBIDTA within 12 months of closing; it’s funding the via $100 million in new debt financing from Ares Capital.
Piper Jaffray is advising RTI, with Sidley Austin and Holland & Knight as legal counsel; Dorsey & Whitney is legal counsel to Paradigm Spine.