Integra Spine Doubles Its Distribution Network
and Revenue Base in Spinal Hardware
Kirt Stephenson Joins Integra as President, U.S.
Spine
Integra LifeSciences Holdings Corporation (Nasdaq:IART) today
announced that it has acquired SeaSpine, Inc., a provider of high
quality, innovative products for the spine fusion market, for $89
million in cash, subject to certain post-closing adjustments. After
the combination, the spine and orthobiologics portfolio is now the
largest component of Integra's Orthopedics revenue category.
SeaSpine develops and distributes a full range of spinal
fixation products, including both hardware and biologics. The
company, based in Vista, California, offers its products to
customers across the U.S. and in select markets in Europe. The
addition of the SeaSpine business effectively doubles Integra's
distribution footprint and customer base in the U.S. spine hardware
market.
"SeaSpine is an ideal strategic fit for Integra, as the
combination brings together two well-respected innovators in the
spinal fusion market," said Stuart Essig, Integra's Chief Executive
Officer. "Integra has a track record of successfully executing
on and integrating strategic transactions, and we expect to realize
the benefits of this combination in both our top line growth and
earnings per share over the long-term."
SeaSpine also brings to Integra an experienced senior management
team with a proven track record in the spine industry. Kirt
Stephenson, formerly the President of SeaSpine, has joined Integra
as President of U.S. Spine, reporting to Brian Larkin, President,
Global Spine & Orthobiologics and Head of Strategic
Development. Along with Mr. Stephenson, the management of
SeaSpine will join the leadership team at Integra.
"We are very excited to become a part of Integra," said Mr.
Stephenson. "Integra's broad access to U.S. hospitals and GPO
agreements across its selling organizations represent a tremendous
opportunity for us to leverage our collective resources and
expertise in the spine market. Integra's strong balance sheet
provides stability and growth capital necessary for us to emerge as
a leader in a rapidly consolidating market."
Specific benefits that SeaSpine and Integra together would bring
include:
- Scale. This transaction substantially increases Integra's
revenue base in spine hardware.
- Expanded Customer Base. SeaSpine brings to Integra new
distributors and customers, essentially doubling Integra's existing
distribution network and establishing a new base of business
outside the U.S.
- Expertise and Resources. The SeaSpine management team
brings spine industry experience to Integra's existing leadership.
Further, the acquisition brings additional resources, such as
training capabilities and a successful product development
team.
- Comprehensive Product Portfolio. SeaSpine's products are
recognized as unique in design and comprehensive in the breadth of
spinal procedures in which they are used. Integra's surgeon
customers will have more options for their patients.
"We are delighted to welcome the SeaSpine organization,
distributors and customers to Integra, as we take yet another step
forward to execute on our strategy in this exciting space," said
Mr. Larkin. "Through this combination, Integra will be able
to provide a broader array of solutions that limit uncertainty for
the busiest surgeons."
SeaSpine generated approximately $50 million in revenue in
2010. SeaSpine has grown profitably each year since its
inception in 2002.
Integra expects to provide detailed guidance regarding the
financial impacts of this transaction when it reports its financial
results for the second quarter of 2011. Preliminarily,
Integra expects this acquisition to add approximately 2 to 3
million dollars to its second quarter revenues and 18 to 20 million
dollars for the second half of the year, in each case net of
potential lost business attributable to the integration.
Integra also expects this acquisition to have a neutral impact to
its 2011 adjusted earnings per share,* and a dilutive impact to its
2011 GAAP earnings per share.
Integra funded this transaction from cash on hand and borrowings
under its line of credit.
Oppenheimer & Co. assisted Integra in connection with the
transaction.
About Integra
Integra LifeSciences, a world leader in medical devices, is
dedicated to limiting uncertainty for surgeons, so they can
concentrate on providing the best patient care. Integra offers
innovative solutions in orthopedics, neurosurgery, spine,
reconstructive and general surgery. For more information,
please visit www.integralife.com.
About SeaSpine
SeaSpine develops and distributes a full range of spinal
fixation products, including both hardware and biologics. The
company offers its products to customers across the U.S. and in
select markets in Europe. SeaSpine was founded in 2002 and is
based in Vista, California. For more information, please visit
www.seaspine.com.
*Adjusted earnings per share exclude acquisition-related costs
and other costs as detailed in our 8-K filed April 28, 2011.
Adjusted EPS is a non-GAAP financial measure and should not
be considered a replacement for GAAP results.
Additional Information
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
that involve risks, uncertainties and reflect Integra's judgment as
of the date of this release. Forward-looking statements
include, but are not limited to, statements concerning expectations
for the strategic benefits that this acquisition will provide to
Integra, the effect of the acquisition on our results of
operations, including revenue growth and earnings per share.
Such forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from predicted or expected results. Among other things,
Integra's ability to successfully integrate the SeaSpine business
into its own operations could affect the extent of the strategic
benefits that Integra generates from this acquisition, and the
impact of the acquisition on results of operations, including
revenue growth and earnings per share. In addition, the
economic, competitive, governmental, technological and other
factors identified under the heading "Risk Factors" included in
Item 1A of Integra's Annual Report on Form 10-K for the year ended
December 31, 2010 and information contained in subsequent filings
with the Securities and Exchange Commission. These
forward-looking statements are made only as of the date hereof, and
Integra undertakes no obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise.
CONTACT: Integra LifeSciences Holdings Corporation
John B. Henneman, III
Executive Vice President,
Finance and Administration,
and Chief Financial Officer
(609) 275-0500
jack.henneman@integralife.com
Investor Relations:
Angela Steinway
(609) 936-2268
angela.steinway@integralife.com
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