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Tornier (TRNX) To Buy Orthohelix Surgical Designs For $135M

 August 24, 2012 09:19 AM


(By Balaseshan) Tornier N.V. (NASDAQ:TRNX), a medical device company focused on providing surgical services to orthopaedic extremity specialists, said it has agreed to buy OrthoHelix Surgical Designs Inc. for $135 million.

Tornier will pay OrthoHelix $100 million in cash and $35 million in Tornier's stock. The acquisition amount also includes additional payments over two years, which will be based on achieving certain revenue growth milestones. Tornier plans to use cash on hand and borrowings to pay for the acquisition.

Upon closing, the transaction is expected to be dilutive to Tornier's 2013 earnings per share, excluding amortization and stock compensation expense, and acquisition and integration related charges, or cash earnings per share, but accretive to its cash earnings per share in 2014.

The combination of OrthoHelix's broad line of plate and screw systems with Tornier's ankle arthroplasty, biologics, and other foot and ankle implants is expected to create one of the broadest product and technology offerings to lower extremity surgical specialists in the orthopedic industry.

Excluding OrthoHelix acquisition and integration related charges, Tornier is reiterating its previously issued standalone financial guidance for fiscal 2012 and third quarter. Tornier expects to issue combined fiscal 2012 guidance reflecting the acquisition of OrthoHelix at the appropriate time once the transaction is closed.

OrthoHelix is focused on developing and marketing specialty implantable screw and plate systems for the repair of small bone fractures and deformities predominantly in the foot and ankle.

OrthoHelix's sales for the calendar 2012, which are all based in the United States, are projected to reach about $29 million, an increase of over 30% compared to 2011.

OrthoHelix's gross profit margin on 2012 sales is expected to exceed 80% and EBITDA is expected to be positive. The addition of OrthoHelix is expected to more than double Tornier's lower extremity revenue and allow Tornier to increase its focus on foot and ankle surgeons.

TRNX closed Thursday's regular session down 0.34% at $17.63. The stock has been trading between $16.69 and $25.91 for the past 52 weeks.

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