Under the agreement, SeaSpine shareholders will receive 0.4163 Orthofix common stock for 1 SeaSpine stock.
After the deal closes Orthofix shareholders will own ~56.5% of the combined company, and SeaSpine shareholders will own the remaining ~43.5%.
The combined company, which will named prior to the closing, will be headquartered in Lewisville. The company will retain primary offices in Carlsbad, along with certain others.
The new company would have revenues of ~$693M as of 12 months ended Sept. 30. It will be a spine and orthopedics company with complementary portfolios of biologics, spinal hardware, bone growth therapies, orthopedic solutions and surgical navigation system, the companies said in an Oct. 11 press release.
The combination is expected to generate at least $40M in annualized cost savings not including stock-based compensation within three years after closing the transaction, the companies added.
Orthofix added that the transaction is expected to be adjusted EBITDA accretive to Orthofix by the second year after close including cost savings.
Keith Valentine, current SeaSpine President and CEO, will serve as president, CEO and board member at the combined company, while Jon Serbousek, current Orthofix President and CEO, will become executive chairman.
The combined entity's board will consist of nine directors, with five designated by Orthofix, including lead independent director, and the remaining four by SeaSpine.
The transaction, which was approved by the boards of both companies, is expected to close in Q1 2023, subject to approval of both companies' shareholders, regulatory approvals, and closing conditions.
SPNE +15.08% to $6.41 premarket Oct. 11
OFIX +1.41% to $18.66 premarket Oct. 11