Wright Medical, Tornier To Merge

(RTTNews) - Specialty orthopaedic company Wright Medical Group Inc (WMGI) Monday agreed to merge with Dutch medical device maker Tornier N.V. (TRNX) in an all stock deal with a combined equity value of about $3.3 billion. As per the terms, each outstanding share of Wright common stock will be exchanged for 1.0309 ordinary shares of Tornier.

For Tornier shareholders, the exchange ratio implies a per share value for Tornier that represents a 28% premium to Tornier's closing share price on October 24, 2014, the last trading day prior to the parties entering into the agreement.

Wright, based in Memphis, TN, said the deal has been unanimously approved by the boards of both companies.

The transaction is expected to close in the first half of 2015.

The merger will create a mid-sized growth company equipped with niche technologies in three lucrative areas of orthopaedics - Upper Extremities, Lower Extremities and Biologics.

Wright shareholders will own about 52% of the shares of the combined company and Tornier shareholders will own the rest.

The combined company will conduct business as Wright Medical Group N.V. and will be led by Wright CEO Robert Palmisano. The businesses of Wright and Tornier will be combined and incorporated in the Netherlands.

The U.S. headquarters for the Lower Extremity and Biologics business will be based in Wright's existing facility in Memphis, TN, and its Augment team will continue to be based at its facility in Franklin, TN. The U.S. headquarters for the Upper Extremity business will be based within Tornier's existing facility in Bloomington, MN.

Wright said the stock-for-stock merger allows shareholders of the combined company to benefit from operational and cost synergies. Once integrated, the companies anticipate revenues of the combined business growing in the mid-teens and adjusted EBITDA margins approaching 20% in three to four years.

The amount of cost synergies is expected to be in the range of $40 million to $45 million anticipated to be fully realized by the third year after completion of the transaction.

Wright anticipates that the transaction will be accretive to the combined companies' adjusted EBITDA in the second full-year after completion of the transaction.