Orthofix Completes Its Acquisition of BREG, Inc. "We have joined the ranks of the most influential and diversified orthopedic
companies, competing in three key market sectors -- spine, trauma and
reconstruction. Our product lines surround the surgeon with preventive,
preoperative, operating room, and postoperative products."
HUNTERSVILLE, N.C. and VISTA, Calif., Dec. 31 /PRNewswire-FirstCall/ --
Orthofix announced today it has completed its acquisition of privately held
BREG, Inc., a market leader in the sale of orthopedic postoperative
reconstruction and rehabilitative products to hospitals and orthopedic offices. The purchase price for the acquisition was approximately $159 million after
closing adjustments and after valuing the Orthofix common stock issued in the
transaction at current trading prices. The acquisition was financed with $110
million of debt, cash on hand, and the issuance of 731,715 shares of Orthofix
common stock. The senior secured bank financing for the acquisition was arranged
by Wachovia Securities, which also acted as Orthofix's financial advisor.
"This acquisition represents a significant milestone in our strategy to
strengthen and grow our franchises in the three key sectors in orthopedics:
spine, reconstruction, and trauma," said Charles W. Federico, Group President
and Chief Executive Officer of Orthofix. "This acquisition is a superb strategic
fit and at the same time is expected to be accretive to Orthofix's revenues,
cash flow and earnings growth in 2004 and beyond." The combined company is expected to generate approximately $292 million in total
revenues in 2004, with earnings per share (EPS), subject to final purchase price
allocation, of approximately $2.60 on a projected 15.6 million diluted shares
(See Table 1, "Projected Post-Acquisition Combined Revenue by Sector"). For the
12-month period ended Sept. 30, 2003, BREG generated $58.3 million in revenues
and $7.7 million in net income.
"This acquisition presents Orthofix with numerous opportunities," Federico
added. "First and perhaps foremost, it immediately diversifies our product
lines, thereby diminishing our dependence on the success of any single product. Further, it rapidly creates new sales-channel opportunities for Orthofix;
combined with BREG, we become a distribution leader in both the office-based and
postoperative market, and will aggressively seek opportunities for cross-selling
Orthofix products. In addition, any emerging- technology company seeking
distribution into the office-care environment will view Orthofix as an
outstanding strategic partner," said Federico. "With this acquisition, Orthofix
now has a formidable sales force calling on the orthopedic office.
"Orthofix is now uniquely positioned within our industry: a big and expanding
company with projected 2004 revenues approaching $300 million -- yet a company
with the capability of being able to quickly capture new opportunities. We are a
very profitable company with broad product lines within three established
franchises, some of which rely on state-of-the-art technology as a superior
advantage, competing in growing markets in which Orthofix has robust
distribution already in place," said Federico. "In short, Orthofix now has much
more in common with the industry's major orthopedic companies." Table 1 Projected Post-Acquisition Combined
Revenue by Sector: (in millions)
Projected
2004 Spinal $58.0 Reconstruction 117.0 Trauma 95.0 Other 22.0 Total Revenue $292.0
Orthofix International, N.V., a diversified orthopedic company, offers a broad
line of minimally invasive surgical, as well as non-surgical, products for the
spine, reconstruction, and trauma market sectors that address the
lifelong-bone-and-joint-health needs of patients of all ages - making possible a
more active and mobile lifestyle. Orthofix's products are widely distributed
around the world to orthopedic surgeons and patients - via Orthofix's 380 sales
representatives, and via partnerships with other leading orthopedic product
companies, such as Medtronic Sofamor Danek, Stryker Howmedica, Kendall
Healthcare and Royce Medical. In addition, Orthofix is collaborating in R&D
partnerships with leading medical institutions such as the Wake Forest
University School of Medicine, the Orthopedic Research and Education Foundation,
the Cleveland Clinic Foundation, Innovative Spinal Technologies and the National
Osteoporosis Institute. For more information about Orthofix, please visit
http://www.orthofix.com/.
FORWARD-LOOKING STATEMENTS: This communication contains certain forward-looking statements under the Private
Securities Litigation Reform Act of 1995. These forward-looking statements,
which may include, but are not limited to, statements concerning the
projections, financial condition, results of operations and businesses of
Orthofix and BREG and the benefits expected to result from the contemplated
transaction, are based on management's current expectations and estimates and
involve risks and uncertainties that could cause actual results or outcomes to
differ materially from those contemplated by the forward-looking statements.
Factors that could cause or contribute to such differences may include, but are
not limited to, risks relating to the integration of the businesses of Orthofix
and BREG, unanticipated expenditures, the final purchase price allocation,
changing relationships with customers, suppliers and strategic partners, risks
relating to the protection of intellectual property, changes to the
reimbursement policies of third parties, changes to governmental regulation of
medical devices, the impact of competitive products, changes to the competitive
environment, the acceptance of new products in the market, conditions of the
orthopedic industry and the economy and other factors described in the most
recent reports on Form 10-Q, most recent reports on Form 10-K and other periodic
reports filed by Orthofix with the Securities and Exchange Commission.
Contact:
Charles W. Federico, Group President and CEO, Orthofix Inc., 704/948-2600
Thomas Hein, CFO, Orthofix Inc., 704/948-2600
DATASOURCE: Orthofix CONTACT: Charles W. Federico, Group President and CEO, or Thomas Hein, CFO of Orthofix Inc., +1-704-948-2600 Web site: http://www.orthofix.com/
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