What have been the Acquisitions in the First Half of this Year?

One of the things about the Spine industry is its dynamism. We continually see new product and technology launches and competitors’ acquisitions and mergers. 2022 ended with the merger between Orthofix and Seaspine. 2023 began with the Globus acquisition of Nuvasive. What have been the acquisitions in the first half of this year?

1.- January 2023: Companion Spine acquires Backbone SAS

• What was acquired? Companion Spine, the French-American specialist in diagnostic and interventional spine pain-management surgery, announced the 10th of January the acquisition of Backbone SAS, a company based in Bordeaux, France, that designs, develops, manufactures and markets functional motion restoration implantable devices to treat spinal disorders.

• Why?
  • The acquisition expands Companion Spine’s portfolio of medical implant solutions with the inclusion of Backbone’s main medical device, the LISA® implant (a Lumbar Implant for Stiffness Augmentation).This acquisition allows Companion Spine to complete its line of treatment solutions for spine diseases, most notably lumbar stenosis and degenerative disc disease, matching implants to the degree of severity of the disease.
  • The acquisition of Backbone by Companion Spine also strengthens the company’s scientific link with the School of Spine Surgery of the University of Bordeaux, founded by Professor Jacques Sénégas. A pioneer in the research of medical devices for the treatment of pathologies related to the spine and more generally to the vertebral column, the school is an institution whose national and international reputation is well established. The school’s activities in the research of medical devices and less invasive surgery began in the 1990s, and its work led to the origination and development of Companion

• What is the LISA® Implant? It is the main medical device from Backbone. It is an effective solution that meets the growing need to treat progressive spinal pathologies more effectively. The device reduces chronic pain related to degenerative diseases of the lumbar spine, preserving form, function and motion, while balancing and restoring the patient’s freedom of movement. The LISA® implant has been CE marked since 2018. Backbone conducted a clinical study on 137 patients in 5 centers in Europe to demonstrate its safety and efficacy, and to provide scientific support for its commercial development in lumbar degenerative disc disease.

2.-February 2023: Globus Medical and NuVasive to Combine in All-Stock Transaction to Create Innovative Global Musculoskeletal Company Focused on Patient Care

• What was adquired? On February 9, Globus Medical and NUVASIVE announced they have entered into a definitive agreement to combine in an all-stock transaction. The transaction brings together two well-regarded technology companies in the musculoskeletal industry, which have a shared vision focused on innovation in a relentless pursuit of unmet clinical needs to improve patient care.

• How? Under the terms of the agreement, which was unanimously approved by the boards of directors of both companies, NuVasive shareholders will receive 0.75 of a share of Globus Medical Class A common stock for each share of NuVasive common stock owned at the closing of the transaction. Based on this exchange ratio, the implied share price for NuVasive would be $57.72, an equity value of $3.1 billion, based on Globus Medical’s closing share price on February 8. Following the close of the transaction, NuVasive shareholders will own approximately 28% of the combined company, and Globus Medical shareholders will own approximately 72%, on a fully diluted basis.

• Why? Strategic and Financial Benefits 
  • Complementary global scale and expanded commercial reach. The transaction accelerates each company’s globalization strategy to target the $50 billion musculoskeletal market, which includes spine, orthopedics, enabling technology, power tools, biologics and more. Together, Globus Medical and NuVasive will have a presence in more than 50 countries with more than 5,000 employees. The new organization’s larger commercial sales organization will enable it to further penetrate existing and future markets, reaching more surgeons and patients around the world.
  • Comprehensive and innovative portfolio in spine and orthopedics. The transaction pairs Globus Medical’s and NuVasive’s complementary spine and orthopedic solutions and enabling technologies to create one of the most comprehensive, innovative offerings in the industry.
  • Continued commitment to product development and surgeon education. Globus Medical and NuVasive both have strong records of developing technology that solves unmet clinical needs for the treatment of musculoskeletal disorders. Globus Medical will continue to prioritize collaboration with healthcare professionals to develop these ground-breaking products and solutions to treat the full continuum of care from planning to execution to postoperative data.
  • Expands operational capabilities. The company will leverage operational excellence capabilities to further unlock manufacturing capacity and asset utilization to support the commercial organization. Globus Medical and NuVasive will benefit from their respective operational advantages—including but not limited to Globus Medical’s strong, in-house manufacturing capacity and NuVasive’s global distribution networks, including NuVasive’s Memphis-based global distribution center.
  • Compelling upside revenue potential. The Globus Medical and NuVasive product, customer, and geographic footprints are highly complementary. As a result, through this transaction, the combined company expects to serve more surgeon customers with more solutions in more geographies around the world, creating compelling growth opportunities over the long-term.
  • Strong financial profile and value creation opportunity. The combined companies have strong track records of delivering above-market net sales growth, through their innovation and commercial channels. The company will leverage Globus Medical’s financial rigor and discipline as it aims to deliver a mid-30-percent EBITDA profile over the next three years, which includes approximately $170 million in identified cost synergies.

3.- March 2023: Xtant Medical Acquires Coflex® Product Line from Surgalign

• What? On February 28, 2023, Xtant Medical and Surgalign entered into a Definitive Agreement and subsequently closed on the transaction whereby Xtant acquired the Coflex^® and Cofix product lines from Surgalign for a total consideration of $17 million.

• Why? According to Sean Browne, President and CEO of Xtant Medical the acquisition will help accelerate Xtant top-line growth and achieve critical mass. Coupled with their less invasive Axle interspinous device and Silex SI Fusion product lines, Coflex augments their offering in the fast-growing segments of ASC and outpatient procedures. Aligning with their key growth pillars, this acquisition expands their footprint by adding new distributors and a significant number of trained surgeons to the Company’s network. These products are expected to add approximately $14 million in annual revenue.

• What is the Coflex Implant? Coflex is an interlaminar stabilization device used after an open decompression that can be performed in various settings, offering a non-fusion treatment option for lumbar spinal stenosis (LSS) patients. The number of patients diagnosed globally with LSS is approximately 2.4 million representing the largest single-growing patient demographic in spine. The Coflex device is the only FDA PMA-approved implant for the treatment of LSS, has been implanted in more than 200,000 patients in over 60 countries, is clinically validated with more than 90 peer reviewed publications and has established Ambulatory Surgery Center (ASC) reimbursement. Cofix is a supplemental fixation device, which is a minimally invasive system intended for use on all levels of the lumbar spine.

4.-APRIL: ATEC Acquires the Accelus Remi Robotic Navigation System

• What? On April 19, Alphatec Holdings, Inc. announced that it has acquired all assets related to the REMI Robotic Navigation System from Fusion Robotics, LLC, a privately held medical technology company, for a purchase price of $55 million.

• Why? The sale of the Remi platform will enable Accelus to focus on its core competencies, including its Adaptive Geometry™ technology and innovative implant systems, including its flagship FlareHawk^® Interbody Fusion System, LineSider^® Spinal System, and new Toro™ Lateral (Toro-L) Interbody Fusion System. As part of the transaction, ATEC will assume Accelus’s robotic research and development lab in Boulder, Colorado, and Accelus Chief Technology Officer Brad Clayton and certain other employees key to the Remi business will transition to join the ATEC team.The capital provided by the sale of the Remi technology will allow Accelus to invest internally, helping the company to improve its offerings more rapidly for both minimally invasive and endoscopic spine surgery. The company also plans to streamline its operations to optimize efficiency, reduce costs and enhance its ability to deliver value to customers. This focus on profitability will enable the company to continue to invest in innovation and grow the business over the long term.

• What is The REMI (Robotic-Enabled Minimally Invasive) System? It is an intra-operative platform developed by spine experts with deep navigation and robotics know-how that integrates navigation and robotics into spine procedures utilizing either a 3D imaging scan or 2D fluoroscopic images of the patient. REMI’s small, table-mounted navigation system guides instrumentation and implants to a precise destination during surgery. The incorporation of REMI into ATEC’s procedural strategy will improve surgical predictability, reduce radiation exposure and enhance intra-operative precision.

5.- June: Zavation, a Gemspring Capital Portfolio Company, Acquires CoreLink

• What? On June 26, Zavation Medical Products, LLC announced that it has acquired CoreLink, LLC (“CoreLink”).The transaction combines two market-leading businesses that share a common foundation of engineering unique spinal solutions, providing unparalleled service and enhancing the quality of life for patients around the world. Zavation and CoreLink will continue to operate under their respective brands and the combined business will be led by Zavation CEO Jeffrey Johnson, while Jay Bartling, CEO of CoreLink, will become Chairman of the Board of Directors. The Stephens Group will maintain a minority stake in the combined entity. Financial terms were not disclosed.For over two decades, CoreLink has solidified itself as a leading provider of novel devices and instrumentation for spinal surgery and more recently has established a differentiated product portfolio supporting lateral spine procedures. CoreLink has uniquely leveraged in-house additive manufacturing techniques to launch its proprietary Mimetic Metal® technology which drives improved patient outcomes. At the same time, CoreLink has invested significantly in medical education including development of a state-of-the-art Bioskills facility in St. Louis, Missouri, to meet evolving surgical needs.

• Why? The combination of Zavation and CoreLink brings together two highly complementary product portfolios across spine and interventional pain management, geographic footprints and customer bases spanning in-patient and outpatient delivery of care. By joining forces, the businesses have established a high-growth platform of scale for spinal solutions led by a world-class management team and well-positioned to unlock additional opportunities for expansion. The increased scale allows the combined company to continue investing in innovative technologies and offers surgeon and distributor partners more rapid product development and enhanced customer service.