Lumbar spine device company TranS1 Inc., has entered into a definitive agreement to acquire Baxano, Inc., a privately-held medical device company that develops solution for restoration of spine function.
We’ve covered Baxano before and rather like some of its technologies. Last year the company saw its iO-Flex® decompression system CE marked and more recently the FDA cleared the iO-Tome™ Device For Precise Facet Joint Removal, as we reported here.
The agreement will see TranS1 issuing approximately 10.4 million shares of its Common Stock and paying $550,000 of cash to acquire Baxano. This equates to approximately $23.6 million of value based on the March 1, 2013 closing price. TranS1 will also refinance $3.0 million of existing debt of Baxano in the transaction at closing.
The transaction is currently expected to close early in the second quarter of 2013 and is subject to TranS1 shareholder approval and customary conditions to closing as detailed in the Merger Agreement.
So, why is TranS1 keen to seal this deal? Well, Baxano’s line complements TranS1’s portfolio and should expand its focus on minimally invasive lumbar spine treatments. There will be economies of scale as the company broadens its sales force coverage and exploits cross-selling opportunities within the MIS surgeon customer base.
“We believe that Baxano is a complementary strategic fit for our product portfolio,” said Ken Reali, President and Chief Executive Officer of TranS1. “Minimally invasive treatments are the fastest growing segment of the spine market. The combination of our AxiaLIF® and VEOTM lumbar fusion products with Baxano’s iO-Flex and iO-Tome systems for lumbar direct decompression and facetectomy, respectively, will allow us to better meet the needs of our spine surgeon customers. This merger will create a unique company with the vision of being a leader in providing less invasive and minimally invasive solutions for spine disorders.”
“We are enthusiastic about the combination of Baxano with TranS1,” said Tony Recupero, President and Chief Executive Officer of Baxano. “We believe the combined company will have a compelling set of minimally invasive products to benefit patients, surgeons, hospitals and payors and will continue to build on the positive sales momentum we have built at Baxano over the past few years.”
Source: TranS1, Inc., Globe Newswire