Wright Medical Group, Inc. and Tornier NV’s $3.3 billion merger announced a year ago will cost them an ankle and toe.
The companies announced on September 30, 2015 that the Federal Trade Commission (FTC) approved the deal on condition that Tornier’s U.S. right and assets related to total ankle replacements and total silastic toe joint replacements used to treat arthritis, are sold. The assets will be sold to Integra LifeSciences Holding Corporation.
In an 8-K filing on October 1, 2015, Wright Medical disclosed that is has asked the SEC to delist its common stock from the NASDAQ Global Select Market.
Reverse Merger
As a result of the merger, a change in control of Wright occurred and the surviving entity of the merger, Wright, became an indirect, wholly owned subsidiary of Tornier, which was renamed “Wright Medical Group, N.V.”
Former Wright stockholders own approximately 52% of Wright N.V. on a fully diluted basis and former Tornier shareholders own approximately 48% of Wright N.V. on a fully diluted basis.
All of the current directors of the Wright board of directors resigned from their directorships of Wright Medical. Gary Blackford, John Miclot, Robert Palmisano, Amy Paul and David Stevens will continue as directors of Wright Medical Group N.V.
Girin and Senner Agreements
Wright entered into letter agreements with Pascal Girin and Jason Senner, executive officers of Wright, in connection with their previously disclosed planned departure from the combined company. Under the agreements Girin and Senner will remain employed by Wright until December 1, 2015 and December 31, 2015, respectively. In the meantime, each will continue to receive his base salary and will continue to be eligible to participate in the employee benefit plans.
Wright agreed to provide Girin and Senner with certain severance payments.
Girin’s agreement says that if he has not accepted full-time employment or a full-time engagement as an independent contractor for a company other than Wright, or has not otherwise engaged his own business on a full-time basis, Wright agrees to enter into a consulting agreement with him.
The consulting agreement provides that Girin will provide services for Wright, until June 1, 2016. Girin will be entitled to receive a monthly consulting fee equal to the monthly base salary he received immediately prior to the effective date of the consulting agreement.
Leading Extremities Company
BMO Capital Market analyst, Joanne Wuensch, said the deal creates a “leading extremities company, doubling the revenue base, with management commentary for revenue growth in the mid-teens and a pathway to positive EBITDA (having targeted $40-45 million in cost-cutting opportunities), while leveraging the two franchises and headquartered in the Netherlands. It also does not preclude the combined asset from being acquired at another date in the future, given that it now has critical mass.”
Long live Wright N.V.
