Alphatec Holdings, also known as spine surgery company ATEC, has moved to acquire Paris-based EOS imaging, makers of FDA-cleared scanners and 3D orthopedic procedure planning software.
The nearly $122 million deal is built from a combination of cash and equity and includes a purchase price of up to $88 million plus a debt retirement of $33.9 million.
“This is a monumental transaction for ATEC,” Chairman and CEO Pat Miles said in a statement. “This transaction will integrate spine imaging and anatomical modeling onto the platform to actually inform the operative experience.”
EOS received a green light (PDF) from the FDA last November for EOSedge, a general X-ray system for musculoskeletal imaging designed to work with the company’s surgical planning software for spine, hip and knee procedures. It also launched the device in Europe, Canada and Australia around the same time.
The system’s open-cabin design allows for biplanar, full-body exams of adults and children in functional positions and weight-bearing poses to provide more data on their body’s alignment during diagnosis.
“We are very enthusiastic about the opportunity to join the complementary strengths and know-how of EOS imaging and ATEC,” said EOS CEO Mike Lobinsky. “I have no doubt that our organizations will be able to quickly create a highly differentiated end-to-end offering that will accelerate growth in the U.S. in the short term, while we continue to expand internationally, paving the way for the future global growth of the combined entity.”
Once the transaction is closed, ATEC expects the deal to immediately expand its revenue—with EOS maintaining an installed base of over 350 imaging systems in over 30 countries, conducting over 1 million imaging exams annually. ATEC has also pointed to the opportunity to expand its own sales network through EOS’ global footprint.
Under the offer, EOS shareholders would receive either €2.80, or $3.07 U.S., for each share, or 0.5 shares of ATEC common stock, currently trading at about $6. The cash price represents a 64% premium above EOS share value, according to the companies—which plan to file the deal with the French Financial Markets Authority in late April and expect the deal to close in the third quarter.
Additionally, ATEC entered into a commitment letter with Perceptive Advisors to provide debt financing of up to $160 million from its affiliates. This includes a committed facility of up to $60 million to retire certain existing debts of ATEC plus up to $100 million to fund the company’s cash offer for EOS.