Globus Medical (GMED), a musculoskeletal solutions company, and NUVASIVE (NUVA) providing spine technology innovation, on Thursday announced entering into a definitive agreement to combine in an all-stock transaction.
NuVasive shareholders would 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.
The transaction is expected to close in the middle of 2023. Following the close of the transaction, NuVasive shareholders would own approximately 28% of the combined company, and Globus Medical shareholders would own approximately 72%, on a fully diluted basis.
The transaction is expected to provide complementary global scale, expanded commercial reach, comprehensive and innovative portfolio in spine and orthopedics, and above all an upside revenue potential that would help the combined entity to transform into a leading musculoskeletal technology company.
The company aims to deliver a mid-30-percent EBITDA profile over the next three years, which includes approximately $170 million in identified cost synergies.
David Paul, Chairman of the Globus Medical board of directors, would serve as Chairman of the combined company’s board of directors. Dan Scavilla would serve as the chief executive officer and as a member of the board. Keith Pfeil, chief financial officer of Globus Medical, would serve as chief financial officer of the combined company.
For full year 2022, Globus Medical has announced preliminary 2022 net sales growth of 6.8% or 8.2% in constant currency, as compared to net sales of $958.1 million for the full year of 2021. NuVasive has announced preliminary 2022 net sales growth of 5.5% or 8.5% at constant currency, as compared to net sales of $1,139.0 million for the full year of 2021.
For full year 2023, Globus Medical expects net sales growth of 7%?8% constant currency, as compared to full year 2022. NuVasive expects 2023 net sales growth of 6%?8% constant currency, as compared to full year 2022.
Goldman Sachs & Co. LLC is serving as financial advisor to Globus Medical, and Goodwin Proctor LLP is serving as legal counsel. BofA Securities, Inc. is serving as financial advisor to NuVasive, and Wachtell, Lipton, Rosen & Katz is serving as legal counsel.
Shares of Globus Medical are currently trading in pre-market at $68.51, down $8.45 or 10.98 percent from the previous close.
Shares of NuVasive are currently trading in pre-market at $49.59, up $3.81 or 8.32 percent from the previous close.
Source: Read Full Article