Titan Medical announced today that it entered into a definitive amalgamation agreement to combine with Conavi Medical.
The companies aim to combine in an all-stock transaction, focusing on commercializing Conavi’s Novasight Hybrid system. Conavi designed Novasight Hybrid to guide common minimally invasive coronary procedures.
This merger comes after more than a year of uncertainty around the future at Titan Medical. In late 2022, Titan suspended a special meeting of shareholders meant to vote on a share consolidation plan. Management decided to begin a strategic review, with a sale of the company considered a possibility. Titan also announced cost-cutting measures that included the furloughing of 40 employees.
In a news release, the company said it conducted outreach to more than 40 potential counterparties and halted the development of its ENOS surgical robot in February 2023. To avoid insolvency, the company began selling assets and licensed its IP. It struck deals on that front in May, June and August 2023, including licensing surgical robotics IP to market leader Intuitive Surgical.
Titan said it determined that merging with another surgical robotics company was “not a viable option.” It expanded its search and landed on Conavi.
“This merger is the result of a thoughtful and careful review of strategic options and reflects the continued commitment of our management team and board of directors to deliver value to shareholders,” said Paul Cataford, Titan’s interim CEO and board chair. “Conavi is an exciting commercial-stage company with groundbreaking technology and an accomplished management team. We are confident in their ability to continue to drive adoption of the Novasight Hybrid system.”
More about Conavi Medical
Conavi Medical designs, manufactures and markets imaging technologies for guiding minimally invasive cardiovascular procedures. Novasight Hybrid combines both intravascular ultrasound (IVUS) and optical coherence tomography (OCT) to enable simultaneous and co-registered imaging of coronary arteries.
The Novasight Hybrid system has FDA 510(k) clearance and regulatory nods in other geographies like Canada, China and Japan.
With Titan Medical, Conavi expects the combined company to become a commercial-stage leader in hybrid intravascular imaging.
“This planned merger comes at a pivotal moment in the evolution of our company as we continue to advance the Novasight Hybrid system, which provides simultaneous and complementary data with which to better inform patient care, while offering providers a more cost- and space-effective option when purchasing intravascular imaging equipment,” said Conavi CEO Thomas Looby. “Gaining access to the public capital markets will enhance our financial strength and fuel our growth strategy, enabling us to unlock the full potential of our hybrid imaging technology in the United States and globally.”
More details on the Titan Medical-Conavi Medical merger
Under the terms of the agreement, Titan plans to acquire all issued and outstanding shares of Conavi. In exchange, Conavi shareholders, receive common shares of Titan. The deal constitutes a reverse takeover of Titan. In connection with the merger, Titan expects to delist its common shares from the Toronto Stock Exchange. Instead, they will be listed on the TSX Venture Exchange.
The companies expect the transaction to close on or around July 15, 2024.
Titan plans to effect a consolidation of its shares. As a condition to the completion, Conavi plans to complete a concurrent financing of subscription receipts. The companies anticipate minimum gross proceeds of $15 million with a maximum of $20 million.
Following the consolidation and concurrent financing, a wholly-owned Titan subsidiary will amalgamate with Conavi. Oustanding post-consolidation Titan shares then go to Conavi shareholders. The companies value Conavi at $69.84 million and the deal includes an allocation of $5 million in the pre-transaction valuation of Titan.
Titan plans to hold a special and annual meeting of shareholders to approve a number of conditions within the deal. That includes the change of the name from Titan Medical to Conavi Medical, or such other name as approved by their boards. Other conditions include the consolidation and a new equity incentive plan.
