Development-stage medical device company SafeStitch Medical and privately held company TransEnterix announced they have closed SafeStitch's previously announced acquisition of TransEnterix. It is planned that the newly combined company will be called TransEnterix, subject to stockholder approval, and will be headquartered in Research Triangle, N.C. The company will continue trading under the name SafeStitch Medical on the OTCBB with the symbol SFES until the anticipated name change is approved by stockholders; this is expected to happen during the fourth quarter of 2013.
The current CEO of TransEnterix, Todd M. Pope, will serve as CEO and a director of the combined company. Serving as chairman of the combined company's board of directors will be Paul A. LaViolette, a partner at SV Life Sciences and chairman of TransEnterix. Former SafeStitch Medical chairperson Dr. Jane Hsiao will continue serving as a director of the combined company, and joining the company as a director will be Dr. Phillip Frost, CEO and chairman of OPKO Health and chairman of Teva Pharmaceutical Industries. The combined company's remaining directors are: Dr. Aftab R. Kherani, principal of Aisling Capital; David B. Milne, managing partner at SV Life Sciences; Dennis J. Dougherty, managing general partner of Intersouth Partners; Richard C. Pfenniger, former CEO of Continuecare Corporation and a member of the SafeStitch board prior to the merger; and William N. Starling, managing director of Synergy Life Science Partners, LP.
TransEnterix believes the merger with SafeStitch will enhance its ability to bring flexible minimally invasive surgical technologies to the market. The fundraising related to the merger provides TransEnterix with needed resources to advance the development of SurgiBot, which is a novel patient-side minimally invasive surgical robotic system.
According to the terms of the merger agreement, SafeStitch Medical issued around 105.5 million shares of its common stock to TransEnterix stockholders and has reserved approximately 17 million shares for exercise of TransEnterix options and warrants, also paying an aggregate of around $350,000 in cash to former TransEnterix stockholders whose shares did not convert to SafeStitch shares.
Simultaneous with the closing of the merger, SafeStitch raised $30.2 million, prior to offering expenses, in a private placement of its equity securities. Existing TransEnterix investors contributed $19.7 million, and Dr. Phillip Frost and Dr. Jane Hsiao - either personally or through affiliated parties - as well as other existing SafeStitch investors, contributed an additional $10.5 million in the financing.
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