Join        Login             Stock Quote

Biomimetic Therapeutics (BMTI) Jumps After Business Combination With Wright Medical (WMGI)

 November 19, 2012 07:22 AM

(By Balaseshan) BioMimetic Therapeutics Inc. (NASDAQ: BMTI) shares jumped 74.22% in premarket after it has agreed with Wright Medical Group Inc. (NASDAQ: WMGI) for a business combination.

The transaction will combine BioMimetic's breakthrough biologics platform and pipeline with Wright's established sales force and product portfolio, to further accelerate growth opportunities in Wright's Extremities business.

Under the terms of the agreement, the transaction has a total potential value for BioMimetic shareholders of about $380 million, or $12.97 per share, based on Wright's closing stock price on November 16.

[Related -Biomimetic Therapeutics (BMTI) Begins Augment Chronic Tendinopathy Trial For Tennis Elbow]

Each share of BioMimetic common stock will be converted into the right to receive an upfront payment of $1.50 in cash and 0.2482 shares of Wright common stock. The upfront payment values BioMimetic at about $190 million, or $6.47 per share, based on Wright's closing stock price on November 16.

Each BioMimetic share will also receive one tradable Contingent Value Right (CVR), which entitles its holder to receive additional cash payments of up to $6.50 per share, which are payable upon receipt of FDA approval of Augment Bone Graft and upon achieving certain revenue milestones.

Although Wright cannot finalize the purchase price allocation and fair value assessment of the contingent consideration until the closing, and thus cannot yet assess the exact impact on its future GAAP earnings, Wright anticipates that the transaction will be dilutive to adjusted EBITDA until the second full-year post-FDA approval of Augment Bone Graft and accretive thereafter.

[Related -Medical Supply Stocks To Get Hit By The Taxman, Yeah, The Taxman]

Any contingent milestone payments will be paid in cash. The CVR payments to BioMimetic shareholders are structured as follows: $3.50 per share upon FDA approval of Augment Bone Graft; $1.50 per share upon the achievement of $40 million in trailing twelve month sales for all products contributed by BioMimetic; and $1.50 per share upon the achievement of $70 million in trailing twelve month sales for all products contributed by BioMimetic.

The latter two sales milestone payments cannot be made sooner than 24 and 36 months post-closing of the transaction, respectively. Wright will provide additional information on the financial impact of the transaction after the closing.

The transaction is expected to close in the first quarter of 2013. The transaction received the unanimous approval of the board of directors of both Wright and BioMimetic. In addition, several key shareholders of BioMimetic have evidenced their support of the transaction by entering into agreements to vote in favor of the transaction.

WMGI closed Friday's regular session up 1.27% at $20.01, while BMTI ended down 0.72% at $4.15.

iOnTheMarket Premium


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageThe Soda Industry Is Dying - But PepsiCo Will Thrive

Although diet crazes come and go, one trend has become clear: Americans are drinking less soda. Per-capita read on...

article imageDefensive Sectors Lead Hesitant Market, But Traders Honor Long-standing Bullish Support

Last week, the major indexes fell back below round-number thresholds that had taken a lot of effort to read on...

article imageWill Janet Yellen's Outlook Prevail?

Federal Reserve Chairwoman Janet Yellen told the crowd last week that rate hikes are coming. The rise will read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.