Greatbatch, Inc. Announces Proposal to Spin-Off Its Algostim Subsidiary
April 30 2015 - 09:00AM
Greatbatch, Inc. (NYSE:GB) today announced a proposed tax-free
spin-off of Algostim, LLC. Algostim is a subsidiary of Greatbatch's
QiG Group, which was established in 2008 to design and develop a
broad-based neurostimulation platform. Algostim's Algovita Spinal
Cord Stimulation (SCS) system is the first application of the
platform, with additional QiG applications currently in
development.
The spin-off would create a new publicly traded company focused
on commercializing the Algovita Spinal Cord Stimulation system to
treat chronic intractable pain of the trunk and/or limbs, with
Greatbatch continuing to focus on expanding its core business and
providing complete medical device systems for its customers.
The Algovita system incorporates an extensive array of
Greatbatch intellectual property, advanced technology and
innovative programming features. The system received CE mark from
the designated European Notified Body, TÜV SÜD America in June,
2014 and an application has been submitted for Pre-Market Approval
(PMA) with the U.S. Food and Drug Administration (FDA). Greatbatch
has been informed by the FDA that it has determined that the PMA
application is approvable subject to an FDA inspection that finds
the manufacturing facilities, methods and controls in compliance
with the applicable requirements of the Quality System
regulation. Greatbatch would continue to manufacture the
Algovita Spinal Cord Stimulation system under a long term supply
agreement with the new public company.
"Over the past nine years, Greatbatch has undertaken a strategic
evolution from strictly developing components and subassemblies to
also developing complete active implantable medical device (AIMD)
systems for our customers," said Thomas J. Hook, president and CEO
of Greatbatch, Inc. "Spinning-off Algostim would provide both
entities the focus and flexibility needed to execute their growth
initiatives, their strategic imperatives and provide their
respective customers with unparalleled service. The end result
would further advance the global medical device market and enhance
shareholder value."
Greatbatch's Board of Directors believes that spinning off
Algostim would allow each company to better allocate resources to
meet the needs of their respective businesses, pursue distinct
capital allocation strategies, focus on different growth
opportunities and provide a clearer investment proposition to
attract long-term investors best suited to each company.
The proposed spin-off is consistent with Greatbatch's strategy
to combine its design, development and manufacturing abilities with
the sales and distribution strength of a commercialization partner
for QiG's complete medical device systems.
After the spin-off Greatbatch would continue to capitalize on
its considerable and growing intellectual property holdings to
design, develop and manufacture discrete technologies and complete
medical device systems in the Cardiac, Neurostimulation, Vascular,
Orthopaedic, Portable Medical and Energy markets it serves.
Combining its intellectual property standing with the customer
relationships and engineering services of CCC Medical Devices and
NeuroNexus further position Greatbatch as a leading developer and
manufacturer in the neurostimulation market.
Greatbatch will provide further details regarding the board of
directors and management team of Algostim at a later date.
The spin-off is expected to be completed by the end of 2015, but
remains subject to final approval of the Greatbatch Board of
Directors, confirmation of the tax-free nature of the transaction,
and the effectiveness of a Form 10 registration statement to be
filed with the U.S. Securities and Exchange Commission, among other
conditions. Greatbatch has retained Piper Jaffray & Co. as
its financial advisor and Hodgson Russ, LLP as its legal
counsel.
Greatbatch President & Chief Executive officer, Thomas J.
Hook, and Executive Vice President and Chief Financial Officer,
Michael Dinkins, will host a conference call today at 5:00 p.m. EDT
to discuss the Company's financial results for the first quarter
2015 and the proposed spin-off.
About Greatbatch, Inc.
Greatbatch, Inc. (NYSE:GB) provides top-quality technologies to
industries that depend on reliable, long-lasting performance
through its brands Greatbatch Medical, Electrochem and QiG Group.
The company develops and manufactures critical medical device
technologies for the Cardiac, Neurostimulation, Vascular and
Orthopaedic markets; and batteries for high-end niche applications
in the portable medical, energy, military, and environmental
markets. Additional information is available at
www.greatbatch.com.
Forward-Looking Statements
Some of the statements in this press release, including the
information regarding Greatbatch's expectations and plans for the
spin-off and the future prospects of the businesses as independent
companies are "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and section
21E of the Securities Exchange Act of 1934, as amended, and involve
a number of risks and uncertainties. These statements can be
identified by terminology such as "may," "will," "should," "could,"
"expects," "intends," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential" or "continue," or the negative
of these terms or other comparable terminology. These statements
are based on the Company's current expectations. The Company's
actual results could differ materially from those stated or implied
in such forward-looking statements. Risks and uncertainties that
could cause actual results to differ materially from those stated
or implied by such forward-looking statements include, among
others, the taxable nature of the spin-off, the timing and
successful execution of the spin-off, the performance of Algostim
post spin-off, and the following matters affecting the Company: our
dependence upon a limited number of customers; customer ordering
patterns; product obsolescence; our inability to market current or
future products; pricing/vertical integration pressure from
customers; our ability to timely and successfully implement our
cost reduction and plant consolidation initiatives; our reliance on
third party suppliers for raw materials, products and
subcomponents; our inability to maintain high quality standards for
our products; challenges to our intellectual property rights;
product liability claims; our inability to successfully consummate
and integrate acquisitions and to realize synergies; our
unsuccessful expansion into new markets; our ability to realize a
return on our substantial RD&E investments, including system
and device products; our inability to obtain licenses to key
technology; regulatory changes or consolidation in the healthcare
industry; global economic factors including currency exchange rates
and interest rates; the resolution of various legal actions and
other risks and uncertainties described in the Company's Annual
Report on Form 10-K and in other periodic filings with the
Securities and Exchange Commission. The Company assumes no
obligation to update forward-looking information in this press
release whether to reflect changed assumptions, the occurrence of
unanticipated events or changes in future operating results,
financial conditions or prospects, or otherwise.
CONTACT: Investor Relations Contact:
Elizabeth Cowell
ecowell@greatbatch.com
tel 214-618-4982
Media Contact:
Christopher Knospe
cknospe@greatbatch.com
tel 716-759-5727
Integer (NYSE:ITGR)
Historical Stock Chart
From Feb 2024 to Mar 2024
Integer (NYSE:ITGR)
Historical Stock Chart
From Mar 2023 to Mar 2024