Alphatec to Combine With Technology Leader Scient'X
27 September 2006 - 8:18PM
PR Newswire (US)
Transaction Provides Alphatec Scale, Technology and Global
Footprint CARLSBAD, Calif., Sept. 27 /PRNewswire-FirstCall/ --
Alphatec Holdings, Inc. (NASDAQ:ATEC), a spinal device company that
provides customized products and a broad suite of spine fusion
solutions, announced today that it has signed an agreement to
combine with spinal product innovator Scient'X, a company that
operates in over 30 countries and is the second largest spinal
implant company in France and the fifth largest in Europe. The
combination forms one of the largest independent spine companies in
the world. Alphatec Chairman, John H. Foster said, "Scient'X is an
innovator in spine, having introduced PEEK spacers in 1997; dynamic
stabilization in 1996; and the first ceramic-on-ceramic cervical
disc. Furthermore, the companies are well known to each other and
fit well together with respect to corporate culture, geographic
coverage, product line, manufacturing, growth rate, R&D and
physician relationships. Finally, the acquisition reflects further
successful strategy execution which combines a strong physician
service platform and technology leadership." The transaction
principally consists of the purchase of the controlling share of
Scient'X from the French company Ideal Medical Products (Euronext
Paris: IMP) giving majority ownership to Alphatec, which will
immediately combine the companies' operations and product lines.
The business combination process will be completed as two separate
transactions. In one transaction, Alphatec will purchase an
aggregate of 2.15 million shares of Ideal Medical (which represents
61.3% of the outstanding stock of Ideal Medical) from Olivier Carli
and Christian Carli for aggregate consideration of approximately
$70.2 million (which represents a purchase price per share of
approximately $32.69), with 15% of the consideration paid in cash
and 85% of the consideration paid in common stock of Alphatec. In
the other transaction, which shall close simultaneously, Alphatec
will purchase 3.95 million shares of Scient'X (which represents
33.1% of the outstanding stock of Scient'X) from an affiliate of
HealthpointCapital Partners, L.P., for aggregate consideration of
approximately $56.5 million in common stock of Alphatec. Following
the completion of these transactions, Alphatec will directly and
indirectly own 61.3% of Ideal Medical and 74.1% of Scient'X. The
closing of the transactions are subject to certain closing
conditions, including approval by Alphatec's stockholders, Alphatec
obtaining the required financing and the approval of all applicable
anti-trust agencies. After the closing of the transactions above,
Alphatec will initiate a tender offer to purchase all shares of
Ideal Medical that are not held already by Alphatec. The terms of
the tender offer will be substantially equivalent to the terms upon
which the Ideal Medical shares were purchased from Olivier Carli
and Christian Carli, however, the tender offer will contain an
option for these shareholders to receive consideration entirely in
cash. Ronald G. Hiscock, President and Chief Executive Officer of
Alphatec, stated, "This event is transformational for Alphatec and
positions our combined enterprise to be a global leader in the
spine sector. Our strategy has been to develop a corporate platform
capable of substantial growth and to then create an engine for
innovation. The integration of Scient'X talent, products and
technology completes the initial phase of strategy development."
Hiscock continued, "The cross-selling opportunities of this
combination are evident and substantial. We will gain access to
numerous European and other international markets for Alphatec
products and technologies. In addition, the Scient'X products
dovetail well with our existing product lines enabling us to bring
a stream of innovative products to the US market. We are excited to
begin working with Olivier Carli and the rest of the Scient'X
leadership and its global network of physicians as we collectively
pursue our goal to be the global leader in spine innovation."
Formed in 1989, Scient'X is recognized worldwide as a spinal
product innovator, having invented several devices used everyday in
spinal fusion and other surgeries. It was the first company to
introduce PEEK spacers, which are now a standard of care in fusion
procedures. Scient'X also introduced the first posterior dynamic
stabilization product, which is now in its second generation. In
addition, Scient'X was the first company to introduce a
ceramic-on-ceramic artificial disc designed for motion
preservation. Scient'X currently sells more than 25 distinct
products for the treatment of spine disorders, 15 of which are sold
in the United States. Scient'X has also distinguished itself in the
spine marketplace for its level of commitment to clinical education
via its sponsorship of the ARGOS and Inspiration events. The
combined company will continue supporting these events and will
seek to surpass the high standard established by Scient'X with
regard to the support of clinical education and training. Olivier
Carli, Chairman of the Board and General Manager of Scient'X
stated, "We are very pleased with this transaction, which will
allow Scient'X to access Alphatec's United States distribution
platform and surgeon relationships. The combination will also allow
the European and American management teams to work together to
accelerate product development and continue to build the Scient'X
franchise in Europe and abroad." As Vice Chairman of the combined
enterprise and a member of the Alphatec board of directors, Mr.
Carli will continue to be at the forefront of Alphatec's
interaction with physicians, managing operations in Europe and
certain other international markets. Scient'X currently holds 21
French patents and 11 patents in the U.S. Scient'X also holds
international patent extensions for procedures in more than 20
countries including Spain, the United Kingdom, Germany, Italy,
Canada, Japan, South Korea, and Brazil. Webcast Review of Scient'X
Transaction At 8:30 a.m. Pacific Time on Thursday, September 28,
Alphatec is hosting a breakfast event in conjunction with the North
American Spine Society (NASS) meeting in Seattle that will include
a review of the Scient'X transaction and will be webcast live.
Management encourages shareholders and other interested parties to
listen to the live webcast of the event by going to the Company's
website at http://www.alphatecspine.com/. Web participants should
go to the Company's website at least 15 minutes prior to the start
of the call to register, download, and install any necessary audio
software. The online archive of the webcast will be available
immediately following the conclusion of the event. Investors and
security holders are advised to read the proxy statement/prospectus
regarding the proposed transaction when it becomes available,
because it will contain important information. Such proxy
statement/prospectus will be filed with the Securities and Exchange
Commission by Alphatec. Investors and security holders may obtain a
free copy of the proxy statement/prospectus (when available) and
other documents filed by Alphatec at the Securities and Exchange
Commission's web site at http://www.sec.gov/. The proxy
statement/prospectus and such other documents may also be obtained
from Alphatec by directing such request to Allen & Caron, Inc.,
18300 Von Karman, Suite 410, Irvine, California 92612, Attn: Matt
Clawson, tel: 949-474-4300; e-mail: . About Alphatec Alphatec is a
medical device company focused on the design, development,
manufacturing and marketing of products for the surgical treatment
of spine disorders. Alphatec's principal product offerings are
primarily focused on the U.S. spine fusion market, which is
estimated to approach $3 billion in 2007, through its wholly-owned
subsidiary, Alphatec Spine, Inc., and include a variety of spinal
implant products and systems comprised of components such as spine
screws, spinal spacers, and plates that offer multiple solutions to
address patients' needs. In addition to Alphatec's U.S. presence,
it also participates in the Japanese spine fusion and orthopedic
trauma markets through its subsidiary, Alphatec Pacific, Inc.
Alphatec's mission is to be a values-based leader in the spinal
device market by providing unmatched service to and taking
scientific direction from our surgeon customers. It does so through
its unique in-house manufacturing facility in Carlsbad, California
that allows it to respond quickly to surgeon needs and to customize
innovative products needed for spine fusion surgery. Forward
Looking Statements This press release may contain forward-looking
statements that involve risks and uncertainty. Such statements are
based on management's current expectations and are subject to a
number of risks and uncertainties that could cause actual results
to differ materially from those described in the forward-looking
statements. Alphatec cautions investors that there can be no
assurance that actual results or business conditions will not
differ materially from those projected or suggested in such
forward-looking statements as a result of various factors,
including, but not limited to, the following: Alphatec's ability to
maintain its level of previously reported sales growth, Alphatec's
ability to develop and expand its spine fusion business in the
United States and Japan, Alphatec's ability to expand and maintain
a successful sales and marketing organization, continuation of
favorable third party payor reimbursement for procedures performed
using our products, unanticipated expenses or liabilities or other
adverse events affecting cash flow or Alphatec's ability to achieve
profitability, uncertainty of additional funding, uncertainty of
success in developing any new products, failure to successfully
introduce and develop new products, including products related to
license agreements, failure to obtain FDA clearance or approval for
particular devices, Alphatec's ability to compete with other
competing products and with emerging new technologies within and
outside of spinal fusion, product liability exposure, patent
infringement claims, claims related to its intellectual property,
that Scient'X's revenues will continue to grow at its prior levels,
that Scient'X will remain the second largest spine company in
France and the fifth largest in Europe, that the combined
enterprise will be a global leader in product innovation, that
Alphatec will be able to successfully combine the operations and
product lines of the two companies, that Alphatec will be able to
successfully continue the ARGOS and Inspiration symposia, that
synergies of the business combination will develop, that Alphatec
will gain access to international markets and physicians in those
markets as a result of this transaction, and that the sales and
distribution channel of the combined enterprise will successfully
sell and market the Scient'X products in the U.S. Please refer to
the risks detailed in Alphatec's Form S-1 on file with the SEC, as
well as the risks detailed from time to time in Alphatec's SEC
reports, including quarterly reports on Form 10-Q, reports on Form
8-K and annual reports on Form 10-K. Alphatec disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events,
or otherwise, unless required by law. DATASOURCE: Alphatec
Holdings, Inc. CONTACT: Investor Relations, Matt Clawson of Allen
& Caron, Inc., +1-949-474-4300, , for Alphatec Holdings, Inc.;
or Stephen T. D. Dixon, CFO and Vice President of Alphatec
Holdings, Inc., +1-760-431-9286 Web site:
http://www.alphatecspine.com/
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