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Bioventus Announces Definitive Agreement to Acquire Misonix

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Bioventus Inc. (Nasdaq: BVS) (“Bioventus”), a global leader in innovations for active healing, and Misonix, Inc. (Nasdaq: MSON) (“Misonix”), a provider of minimally invasive therapeutic ultrasonic technologies and regenerative medicine that enhance clinical outcomes, today announced that they have entered into a definitive agreement by which Bioventus will acquire Misonix in a cash-and-stock transaction.

Under the terms of the agreement, which has been unanimously approved by the boards of directors of both Bioventus and Misonix, Misonix stockholders will receive aggregate consideration that values Misonix at approximately $518 million on a fully diluted basis (based on Bioventus’ 7-day volume-weighted average stock price (VWAP) of $16.6284 per share) as of July 27, 2021. In the transaction, Misonix stockholders may elect to receive either (i) 1.6839 shares of Bioventus class A common stock or (ii) $28.00 in cash, without interest, for each share of Misonix common stock they hold, subject to proration based on an aggregate maximum cash amount payable by Bioventus equal to $10.50 per share of Misonix common stock outstanding shortly prior to the completion of the transaction. The aggregate share consideration represents 25% of the combined company on a fully diluted basis. The aggregate per-share value for
Misonix represents a 25% premium to Misonix’s 30-day VWAP as of July 27, 2021. The transaction is subject to regulatory approvals, Bioventus stockholder approval, Misonix stockholder approval, and other customary closing conditions. It is expected to close in the fourth quarter of 2021.
Following the closing of the transaction, the combined company is expected to conduct business as Bioventus Inc. and will leverage the global strengths of both product brands as a pure-play regenerative medicine and orthopedics company. The merger of Bioventus and Misonix will create a medical technology company positioned with leading products and specialized salesforces serving a $15 billion total addressable market across the hospital, ambulatory surgical center, and office care settings. The highly complementary nature of the two businesses are expected to result in scale across a range of care settings, geographies, and therapeutic areas.

Following the closing of the transaction, the combined company is expected to conduct business as Bioventus Inc. and will leverage the global strengths of both product brands as a pure-play regenerative medicine and orthopedics company. The merger of Bioventus and Misonix will create a medical technology company positioned with leading products and specialized salesforces serving a $15 billion total addressable market across the hospital, ambulatory surgical center, and office care settings. The highly complementary nature of the two businesses are expected to result in scale across a range of care settings, geographies, and therapeutic areas.

Ken Reali, Chief Executive Officer of Bioventus, stated, “We are excited to further establish Bioventus as a differentiated, growth-focused medical technology company with deep and broad capabilities across a range of care settings and specialties. We believe this acquisition will accelerate our growth opportunities, enhance our double-digit revenue growth, and provide a significant opportunity for long-term margin expansion. We believe the combination with Misonix will create significant value for our shareholders and enable us to better serve our customers with more comprehensive solutions and a broader portfolio. The new Bioventus will also unlock meaningful growth opportunities for the employees of both organizations.”
“We are thrilled to announce this agreement to combine with Bioventus and realize our next phase of commercial development,” commented Stavros Vizirgianakis, Chief Executive Officer of Misonix. “Bioventus shares Misonix’s commitment to improving patient outcomes, and we believe this combination will create value for our shareholders as the combined organization continues to drive innovation and increase physician demand.”

The combined entity is anticipated to benefit significantly from opportunities to build on its extensive
capabilities and commercial reach, including:
 Accelerating Misonix’s BoneScalpel and Nexus adoption through Bioventus’ extensive spine surgical solutions footprint;
 Augmenting Bioventus’ leading lower extremity offerings and commercial footprint to accelerate growth in this call point;
 Significantly expanding the direct wound salesforce that covers the entire customer continuum, including physicians’ offices, ambulatory surgical centers, wound clinics, and hospitals; and
 Extending Misonix’s international access through Bioventus’ direct channels and infrastructure in the Netherlands, Canada, Germany, and the UK.

Financial Highlights
Bioventus expects the transaction to add nearly $80 million of calendar year 2021 revenue and provide an incremental 100 basis points to Bioventus’ long-term average annual revenue growth rate before factoring in any potential revenue synergies.

Bioventus also expects the combination to generate $20 million of annual pre-tax cost synergies by the end of the second full year following the completion of the transaction. Cost synergy opportunities include public company expenses, overlapping support and systems costs, and infrastructure expenses.

Bioventus anticipates that the transaction will be accretive to its adjusted EBITDA in the first full year after completion of the transaction and accretive to its adjusted EBITDA margins by the second full year after completion of the transaction.
Structure and Financing

The transaction has been be structured in a manner designed to be a tax-free reorganization for U.S. federal income tax purposes. The combined company will retain Bioventus’ headquarters in Durham, NC.

Bioventus expects to fund the cash portion of the acquisition with cash on hand and through a fully committed financing provided by Wells Fargo. Pro forma for the combination, Bioventus estimates its year- end 2021 net leverage ratio to be approximately 3.6x before factoring in the benefit of any synergies. Bioventus anticipates significant deleveraging in 2022 and beyond.

Governance
Stavros Vizirgianakis, Chief Executive Officer of Misonix and a member of its Board of Directors, and Patrick Beyer, a member of Misonix’s Board of Directors, will be added as members of the Bioventus Board of Directors at the closing of the transaction.

Approvals
The transaction is subject to regulatory approvals, Bioventus stockholder approval, Misonix stockholder approval, and other customary closing conditions. It is expected to close in the fourth quarter of 2021.

As a part of the transaction, certain Bioventus stockholders—Smith & Nephew, EW Healthcare Partners and Ampersand Capital, which in total represent a majority of the overall shareholder base—have evidenced their support by entering into agreements to vote in favor of the transaction.

Certain Misonix stockholders—Stavros Vizirgianakis, SV Health Investors, and 1315 Capital—have also evidenced their support by entering into agreements to vote in favor of the transaction.
Bioventus Second Quarter 2021 Revenue Results Update

This afternoon, Bioventus separately pre-announced preliminary revenue results for the second quarter of 2021. Full financial results for the second quarter will be released after the market closes on August 10, 2021, followed by Bioventus’ previously scheduled earnings call at 5:00pm ET that same day.
Misonix Fourth Quarter and Full Year Revenue Results for Fiscal 2021
This afternoon, Misonix separately pre-announced preliminary revenue results for the fourth quarter and full year of fiscal 2021. Full financial results for the fourth quarter and full year of fiscal 2021 will be released during Misonix’s earnings call on a date to be determined.

Advisors
Perella Weinberg Partners LP acted as lead financial advisor to Bioventus. Morgan Stanley acted as financial advisor to Bioventus. Latham & Watkins LLP provided legal counsel to Bioventus. J.P. Morgan Securities LLC served as exclusive financial advisor to Misonix. Jones Day served as legal advisor to Misonix.

 

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