Just a reminder: Doug Kohrs, the former CEO of AMS, American Medical Systems/Endo Pharmaceuticals now from Dublin, Ireland (producer of FAILED pelvic surgical mesh) and CEO of Tornier-a Minnesota company-now from the Netherlands-that made the elbow that failed in my brother after just 4 months-left abruptly and gave himself $2.6M when the company was failing to bring in a profit.
Oct 28, 2014, 1:17pm CDT
Minneapolis / St. Paul Business Journal
Orthopedic-device maker Tornier has been sold to Wright Medical Group Inc. in an all-stock deal worth $3.3 billion, the companies announced Monday.
Memphis-based Wright Medical Group, which makes surgical devices and bone-growth products, will own 52 percent of the combined company's stock when the deal closes.
The combined company will operate as Wright Medical and be led by Robert Palmisano, Wright's president and CEO. Tornier CEO David Mowry will serve as president and chief operating officer.
Tornier is based in the Netherlands, but its U.S. headquarters and top executives are based in Bloomington. The business ranks as Minnesota's 10th-largest medical-technology company, according to Business Journal research.
Tornier's Bloomington office will serve as the U.S. headquarters for the combined company's upper extremity business unit, Tornier said in a regulatory filing. Wright's U.S. headquarters and executive team will be based in Memphis. Its global headquarters will be based in the Netherlands.
Tornier makes devices for the treating orthopedic problems in shoulders, hand, elbows and other extremities. The company generated $311 million in revenue last year. Wright's sales totaled $242 million in 2013.
October 27, 2014 | By Varun Saxena
Wright Medical Group ($WMGI) plans to merge with peer Tornier ($TRNX) in an all-stock transaction designed to create a pure-play orthopedics extremities and biologics company valued at $3.3 billion. The resulting entity is expected to be a midsized growth company that's in what it says are the three fastest growing areas of orthopedics--upper extremities, lower extremities and biologics.
The newly combined company will be incorporated in the Netherlands, where Tornier is currently headquartered. The inversion deal is one of the first since release of the Treasury Department's rules to deter the tax-saving practice. One of them was a med tech deal between hospital products and services companies Steris and U.K.-based Synergy Health.
During the conference call describing the deal, company officials said the short-term tax advantages will be minimal, according to the Wall Street Journal.
The deal values Tornier at a premium of 28% over its Oct. 24 closing price. Wright shares climbed 6% to $33.50 in after-hours trading on the news, while Tornier gained 31% to $31.44. Each share of Wright common stock will be exchanged for 1.0309 ordinary shares of Tornier.
"Together, we will have one of the most comprehensive upper and lower extremity product portfolios in the market, extending our leadership position and further accelerating our growth opportunities and path to profitability, all of which we believe will generate long-term value for our shareholders. In addition, this will provide our employees with opportunities for career growth and development as part of a much larger, dynamic organization," Robert Palmisano, CEO of Wright Medical, said in a statement.
He will become CEO of the newly combined company, to be known as Wright Medical Group N.V. The U.S. headquarters for the Lower Extremity and Biologics businesses will be in Memphis, TN, where Wright is currently headquartered. The U.S. headquarters for the Upper Extremity business will be based in Bloomington, MN, at an existing Tornier facility. Wright shareholders will own 52% of the new company and Tornier shareholders, 48%.
"Both companies have built a deep and loyal customer base and have highly complementary product portfolios, positioning the combined entity to deliver meaningful value to our shareholders. We believe that partnered together, Wright and Tornier will become the fastest-growing company in the Extremities-Biologics industry," said Tornier CEO David Mowry, who will become COO of Wright Medical Group N.V.
The news comes on the same day as Wright's announcement that it received PMA approval from the FDA for its Augment Bone Graft as an alternative to autograft for ankle and/or hindfoot fusion indications.
Both companies make implants to fix or replace the wrist and ankle as well as biologics to encourage healing and tissue regeneration. Tornier's U.S. portfolio also includes implants for the shoulder and elbow, as well as surgical tools enabling sports medicine.
The new company is expected to have revenues growing in the mid-teens with adjusted EBITDA margins approaching 20% in three to four years. Cost synergies are expected to be in the range of $40 million to $45 million within the first three years after the transaction completes; synergies will be due to overlapping public company expenses, support function and system costs as well as process and vendor consolidation. Wright expects the transaction will be accretive to the new company's adjusted EBITDA in the second full year after the transaction completes.
Separately, Tornier reported Q3 revenues were up 14.9% year over year to $76.7 million. Meanwhile, Wright's quarterly net sales of $71.3 million were up 24%. The transaction is expected to close during the first half of 2015.
Related Articles: Stryker to buy Small Bone Innovations for up to $375M Wright revives prospects of bone graft with FDA resubmission Wright ends an up-and-down year on a high note Wright buying implant outfit for $80M with eye on Europe Tornier snags OrthoHelix for $135M
New Company Will Be Based in Tornier’s Current Home of the Netherlands
By LAUREN POLLOCK Wall Street Journal
Updated Oct. 27, 2014 6:20 p.m. ET
Medical-device companies Wright Medical Group Inc. and Tornier NV agreed to combine in an all-stock deal that would move Wright’s headquarters to the Netherlands.
The companies, which both make orthopaedic devices, said their combined equity value is about $3.3 billion. Wright shareholders will own about 52% of the combined company, while Tornier investors will have 48%.
This deal follows other acquisitions prompted in part by potential tax advantages, known as inversion deals. In recent weeks, the Obama administration has moved to stem that wave of corporate inversions by unveiling new tax rules.
On a conference call, the companies downplayed the tax implications of the deal, saying the near-term advantages are minimal.
The combined company will be called Wright Medical Group NV and will be led by Wright’s current CEO, Robert Palmisano, but it will be based in the Netherlands, with a U.S. home at Wright’s current Memphis base.
Tornier CEO David Mowry will be chief operating officer of the combined company. The board will be made up of five representatives from each company’s existing board.
Wright makes extremity and surgical tools, while Tornier makes tools for surgeons who treat musculoskeletal injuries and disorders of the shoulder, elbow, wrist, hand, ankle and foot.
Write to Lauren Pollock at email@example.com
SHAREHOLDER ALERT: Law Firm of Levi & Korsinsky, LLP Launches Investigation Against the Board of Directors of Wright Medical Group, Inc. Regarding the Fairness of the Sale of the Company to Tornier NV
Published: October 29, 2014
NEW YORK--(BUSINESS WIRE)--Oct. 29, 2014-- Levi & Korsinsky is investigating the Board of Directors of Wright Medical Group, Inc. (“Wright Medical” or “the Company”) (NasdaqGS: WMGI) for possible breaches of fiduciary duty and other violations of state law in connection with the sale of the Company to Tornier NV.
Click here to learn more about the investigation: http://zlk.9nl.com/wright-medical-wmgi.
Under the terms of the transaction, Wright Medical shareholders will receive 1.0309 Tornier common shares for each share of Wright Medical stock they own, representing an approximate value of $24.79 per share, based on Tornier’s recent closing price. The investigation concerns whether the Board of Wright Medical breached their fiduciary duties to stockholders by failing to adequately shop the Company before agreeing to enter into this transaction, and whether Tornier NV is underpaying for Wright Medical shares. In particular, at least one analyst has set a price target for Wright stock at $40 per share.
If you own Wright Medical common stock and wish to obtain additional information, please contact Joseph E. Levi, Esq. either via email at firstname.lastname@example.org or by telephone at (212) 363-7500, toll-free: (877) 363-5972, or visit http://zlk.9nl.com/wright-medical-wmgi.
Levi & Korsinsky is a national firm with offices in New York, New Jersey, Connecticut and Washington D.C. The firm’s attorneys have extensive expertise in prosecuting securities litigation involving financial fraud, representing investors throughout the nation in securities and shareholder lawsuits. For more information, please feel free to contact any of the attorneys listed below. Attorney advertising. Prior results do not guarantee similar outcomes.
Source: Levi & Korsinsky
Levi & Korsinsky, LLP Joseph Levi, Esq., 212-363-7500 or Eduard Korsinsky, Esq., 212-363-7500 30 Broad Street - 24th Floor New York, NY 10004 Toll Free: (877) 363-5972 Fax: (866) 367-6510 www.zlk.com