Ensures Exclusive Access to Breakthrough
Software Enabling Technology to Further Differentiate Wright’s
Product Portfolio and Further Accelerate Growth Opportunities in
Wright’s Global Extremities Business
Wright Medical Group N.V. (NASDAQ:WMGI) today announced the
acquisition of IMASCAP SAS, a leader in the development of
software-based solutions for preoperative planning of shoulder
replacement surgery. The transaction ensures exclusive access
to breakthrough software enabling technology and patents to further
differentiate Wright’s product portfolio and to further accelerate
growth opportunities in Wright’s global Extremities business.
Under the terms of the agreement with IMASCAP, Wright acquired
100% of IMASCAP’s outstanding equity on a fully diluted basis for
total consideration, net of acquired cash, of €75.1 million or
approximately $88.8 million, consisting of approximately €39.7
million, or approximately $46.9 million, in cash and approximately
€13.2 million, or approximately $15.6 million, of Wright ordinary
shares, payable at closing, and approximately €22.2 million, or
approximately $26.3 million, in potential earnouts and milestone
payments for new software modules and a potential future implant
system.
IMASCAP’s Glenosys technology is the preoperative planning
software behind Wright’s BLUEPRINT™ 3D planning software, which
allows the surgeon to simulate the position of a shoulder
prosthesis using CT image data. The surgeon is able to
visualize the shoulder in 3D and rotate through the complete range
of motion in any direction. Before the surgery, the surgeon
can optimize the surgical plan adapted to the patient to choose the
best implant from a range of possibilities. With its simple
and intuitive interface, this virtual surgical plan is seamlessly
translated into the operating room on the day of surgery offering
the potential for reduced surgical time, better outcomes and less
inventory.
Robert Palmisano, president and chief executive officer,
commented, “Wright, and previously Tornier, has been involved with
IMASCAP for many years with our BLUEPRINT case planning software,
and we have seen first-hand the innovation, creativity and
differentiated solutions that the IMASCAP team has developed.
Software-enhanced solutions are the future, and with the
acquisition of IMASCAP, we have the opportunity to take a
significant lead in this area. We are thrilled that we had an
opportunity to acquire IMASCAP, which is the company that has
developed the technology behind our BLUEPRINT case planning
software for our shoulder portfolio. This is a highly
differentiated, enabling technology for the shoulder and has a
number of potential applications to enhance our PROPHECY planning
for ankles as well.”
Palmisano continued, “While our BLUEPRINT planning software is a
significant differentiator today, IMASCAP has a rich pipeline of
potential breakthrough technologies under development and
patent-pending. We believe the future of orthopaedic implant
surgery will include advanced elements of artificial intelligence
and augmented reality. When fully developed, we believe such
software enabled surgery will leapfrog the current mechanical
approaches some orthopaedic companies have developed primarily for
hip and knee replacement surgery.”
Palmisano further commented, “IMASCAP is led by its founder and
CEO, Jean Chaoui. Jean has an impressive background, with
degrees in Biomedical Engineering from Damascus University and
Telecom Brittany (Masters & PhD) with a focus in Biomedical
Imaging. Jean has received 11 patents and has written more
than 30 scientific publications in the field of computer assisted
surgery, and he has completed multiple projects in the areas of
image and bio-signal processing, artificial intelligence and
brain/computer interface. He is a recent recipient of the MIT
Technology Review - Top 10 French Innovators under 35 and a Fellow
in the Young Transatlantic Innovative Leaders Initiative,
representing France. We are delighted that Jean and the
entire IMASCAP team are joining Wright.”
Jean Chaoui, president and chief executive officer of IMASCAP,
added, “We are delighted to have found an excellent strategic buyer
in Wright, a company that shares IMASCAP’s commitment to
technological leadership and who is deeply committed to the success
of our technology. We believe that Wright, with its global
leadership position in the extremities market and expertise in
medical education and product development, is the ideal partner to
realize the full potential of IMASCAP’s technology and product
pipeline and will continue to provide the focus and investment to
enable it to reach its full potential. Also, very
importantly, this will provide our employees with enhanced
opportunities for career growth and development. We look
forward to an exciting future as part of Wright Medical.”
IMASCAP has no revenues; therefore, there is no impact to
Wright’s previously provided full-year 2017 annual net sales
guidance of $740 million to $745 million. Due to the timing
of the closing, the company anticipates incurring minimal
incremental expenses in 2017, and therefore is maintaining its
current full-year 2017 non-GAAP adjusted EBITDA from continuing
operations guidance range of $84 million to $88 million. The
company currently plans to offer this important enabling technology
at no cost to physicians who are implanting Wright’s shoulder
products. Wright will provide additional information on the
financial impact of this transaction and 2018 guidance on its
fourth quarter 2017 earnings call, which is currently scheduled for
February 27, 2018.
For more information on this transaction, please refer to the
investor presentation that is available in the Investor Relations
section of Wright’s website at www.wright.com.
Internet Posting of Information
Wright routinely posts information that may be important to
investors in the “Investor Relations” section of its website at
www.wright.com. The company encourages investors and
potential investors to consult the Wright website regularly for
important information about Wright.
About Wright Medical Group N.V.
Wright Medical Group N.V. is a global medical device company
focused on extremities and biologics products. The company is
committed to delivering innovative, value-added solutions improving
the quality of life for patients worldwide. Wright is a
recognized leader of surgical solutions for the upper extremities
(shoulder, elbow, wrist and hand), lower extremities (foot and
ankle) and biologics markets, three of the fastest growing segments
in orthopaedics. For more information about Wright, visit
www.wright.com.
™ and ® denote trademarks and registered trademarks of Wright
Medical Group N.V. or its affiliates, registered as indicated
in the United States, and in other countries. All other
trademarks and trade names referred to in this release are the
property of their respective owners.
About IMASCAP SAS
IMASCAP SAS develops software for preoperative planning of
shoulder replacement surgery. IMASCAP software system is the
only system in the world allowing orthopaedic surgeons complete
independence for planning, with nothing more than image data
provided by CT scan of the patient. The software allows the surgeon
to automatically conceive a surgical guide adapted particularly to
the patient anatomy, which permits the surgeon to implant the
prosthesis in a position that closely matched the software plan.
The system has been developed in close collaboration with
internationally recognized experts in the shoulder field, providing
an innovative and practical solution to the operating room.
IMASCAP is focused on applying its technical expertise to
serve orthopaedic surgery by
furnishing patient specific solutions
and participating in the development of new generations
of prostheses adapting this new and
innovative technology. For more information please visit
www.imascap.com.
Non-GAAP Financial Measures
To supplement the company’s consolidated financial statements
prepared in accordance with U.S. generally accepted accounting
principles, the company uses certain non-GAAP financial measures in
this release, including . EBITDA, as adjusted, from continuing
operations. The company's non-GAAP adjusted EBITDA from continuing
operations target is measured by adding back to net loss from
continuing operations charges for interest, income taxes,
depreciation and amortization expenses, non-cash share-based
compensation expense and non-operating income and expense.
Additionally, the company’s adjusted EBITDA from continuing
operations target excludes possible future acquisitions; other
material future business developments; and due diligence,
transaction and transition costs associated with acquisitions and
divestitures. Further, this adjusted EBITDA from continuing
operations target excludes any expenses, earnings or losses related
to the divested large joints business, legacy Wright’s divested
OrthoRecon business and legacy Tornier’s divested ankle replacement
and silastic toe products. The company's management believes that
the presentation of non-GAAP financial measures provides useful
information to investors. These measures may assist investors in
evaluating the company's operations, period over period. Wright’s
non-GAAP financial measures exclude such items as non-cash interest
expense related to the company's 2017 convertible notes, 2020
convertible notes and 2021 convertible notes, net gains and losses
on mark-to-market adjustments on and settlements of derivative
assets and liabilities, write-off of unamortized debt discount and
deferred financing charges following the partial settlement of 2017
convertible notes and 2020 convertible notes, mark-to-market
adjustments on CVRs, transaction and transition costs and tax
impacts from changes in the realizability of net operating losses,
all of which may be highly variable, difficult to predict and of a
size that could have substantial impact on the company's reported
results of operations for a period. It is for this reason that the
company cannot provide without unreasonable effort a quantitative
reconciliation to the most directly comparable GAAP measures for
its 2017 financial guidance regarding non-GAAP adjusted EBITDA from
continuing operations. Management uses the non-GAAP measures in
this release internally for evaluation of the performance of the
business, including the allocation of resources and the evaluation
of results relative to employee performance compensation targets.
Investors should consider non-GAAP financial measures only as a
supplement to, not as a substitute for or as superior to, measures
of financial performance prepared in accordance with GAAP.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This release includes forward-looking statements under the
Private Securities Litigation Reform Act of 1995.
These forward-looking statements generally can be identified
by the use of words such as “anticipate,” “expect,” “intend,”
“could,” “may,” “will,” “believe,” “look forward,” “continue,”
“guidance,” “future,” other words of similar meaning and the use of
future dates. Forward-looking statements in this release include,
but are not limited to, statements about the future anticipated
success and benefits of the company’s software-based solutions for
preoperative planning of shoulder replacement surgery and the
company’s anticipated financial results for 2017, including net
sales from continuing operations and adjusted EBITDA from
continuing operations. Forward-looking statements by their nature
address matters that are, to different degrees, uncertain. Each
forward-looking statement contained in this release is subject to
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statement.
Applicable risks and uncertainties include, among others, the
failure to realize the full anticipated benefits of the company’s
software-based solutions for preoperative planning of shoulder
replacement surgery; risks involved in the acquisition of IMASCAP
and the anticipated registration of the resale of the Wright
ordinary shares issued in connection therewith; failure to
integrate the legacy Wright and Tornier businesses and realize net
sales synergies and cost savings from the merger with Tornier or
delay in realization thereof; operating costs and business
disruption as a result of the merger, including adverse effects on
employee retention and sales force productivity and on business
relationships with third parties; integration costs; actual or
contingent liabilities; failure of the company’s recent U.S. sales
force additions, focus on core product portfolio and incentives to
drive U.S. lower extremities and biologics sales or delay in
realization thereof; adverse effects of diverting resources and
attention to providing transition services to the purchaser of the
large joints business; the adequacy of the company’s capital
resources and need for additional financing; the timing of
regulatory approvals and introduction of new products; physician
acceptance, endorsement, and use of new products; failure to
achieve the anticipated benefits from approval of AUGMENT® Bone
Graft; the effect of regulatory actions, changes in and adoption of
reimbursement rates; product liability claims and product recalls;
pending and threatened litigation; risks associated with the
metal-on-metal master settlement agreement and the settlement
agreement with the three settling insurers; risks associated with
the subsequent metal-on-metal settlement agreements and ability to
obtain the additional new insurance proceeds contingent thereon;
risks associated with international operations and expansion;
fluctuations in foreign currency exchange rates; other business
effects, including the effects of industry, economic or political
conditions outside of the company’s control; reliance on
independent distributors and sales agencies; competitor activities;
changes in tax and other legislation; and the risks identified
under the heading “Risk Factors” in Wright’s Annual Report on Form
10-K for the year ended December 25, 2016 filed by Wright with the
SEC on February 23, 2017 and in other subsequent SEC filings by
Wright, including Wright’s Quarterly Report on Form 10-Q for the
quarterly period ended September 24, 2017 filed by Wright with the
SEC on November 2, 2017. Investors should not place considerable
reliance on the forward-looking statements contained in this
release. Investors are encouraged to read Wright’s filings with the
SEC, available at www.sec.gov, for a discussion of these and other
risks and uncertainties. The forward-looking statements in this
release speak only as of the date of this release, and Wright
undertakes no obligation to update or revise any of these
statements. Wright’s business is subject to substantial risks and
uncertainties, including those referenced above. Investors,
potential investors, and others should give careful consideration
to these risks and uncertainties.
Investors & Media:
Julie D. TracySr. Vice President, Chief Communications
OfficerWright Medical Group N.V.(901)
290-5817julie.tracy@wright.com
Wright Medical Group NV (NASDAQ:WMGI)
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