(Gainesville.com)–After 21 years as a public company, Exactech, a Gainesville-based medical device company, announced Monday it agreed to be acquired by TPG Capital, a global private equity platform of alternative asset firm TPG — making it private.
Exactech’s board of directors approved the agreement, which says TPG Capital will acquire all common stock shares of Exactech, paying $42 per share in cash to all shareholders other than certain management stockholders who have agreed to exchange a portion of their shares for new equity securities in the transaction, said Priscilla Bennett, Exactech’s vice president for corporate and marketing communication.
Exactech founders Dr. Bill Petty and Betty Petty and CEO David Petty have agreed with TPG to vote all of their shares in favor of the merger and to exchange a significant portion of their shares for new shares in the parent entity immediately following the merger. Such share exchange will be made at the same $42 value being paid in cash to Exactech’s shareholders.
Essentially, instead of being backed by public shareholders who publicly invest in the company, Exactech will now be invested in by a private equity firm of private investors.
“It’s not like when you’re bought by a company,” Bennett said. “It’s just a change in financial handling.”
The transaction values Exactech at $625 million, which is derived from TPG valuing all common stock at $42 per share, Bennett said.
When the transaction is complete, Exactech will be a privately-held company, its headquarters at 2320 NW 66th Court, and Exactech’s common shares will no longer be listed on the Nasdaq stock exchange. Bennett believes the transaction to be beneficial for both Exactech shareholders and TPG Capital.
“We think we delivered some really strong returns, and (shareholders) have shared our vision,” Bennett said. “But this agreement with TPG Capital allows them to buy all common stock available and deliver maximum value to our shareholders.”
If the transaction goes through, TPG Capital will buy Exactech common stock at a value around 30 percent higher than what the stock was priced on the Nasdaq stock exchange at closing time Sunday, Bennett said.
“That’s how positive they see the future of (Exactech),” Bennett said.
TPG is one of the most active investors in the medical industry, having invested in dozens of health care companies including more than five pharmaceutical companies and in other surgical device companies, like Biomet, a leader in the design and manufacture of products for hip replacement, knee replacement, shoulder replacement, elbow replacement and other small joint replacement.
Exactech, a developer and producer of orthopaedic implant devices and surgical instrumentation for extremities and large joints, announced earlier this year that revenues in 2016 increased 7 percent to $257.6 million from the year before. Domestic revenue increased 5 percent to $176.8 million and international revenue increased 10 percent to $80.8 million in 2016, according to the company. It currently employees more than 700 people globally, Bennett said.
Exactech was founded in November 1985 when the Pettys and biomedical engineer Gary Miller saw the need and had a desire to make a difference in the quality of care provided to patients suffering from joint diseases like arthritis, according its website.
TPG is expected to close on Exactech within the first three months of 2018 and, according to a release, is subject to customary closing conditions, including approval by Exactech’s shareholders.
“None of this would have come to be without the founders and key managers continuing in this investment,” Bennett said.
Source: http://www.gainesville.com