Carlsbad, California-based SeaSpine Holdings Corporation, a global medical technology company focused on surgical spinal products, has announced that it has entered into an agreement to acquire privately held 7D Surgical, Inc.
SeaSpine will acquire all of the issued and outstanding shares of 7D Surgical in a cash and stock agreement valued at $110 million. The agreement builds on the companies’ preexisting relationship from a February 2020 distribution agreement.
According to SeaSpine, “7D Surgical shareholders will receive an aggregate of 4,289,848 shares of SeaSpine stock, equivalent to $82.5 million based on the volume-weighted price between March 8, 2021 and March 19, 2021, and an aggregate of $27.5 million in cash.” Additionally, “SeaSpine expects to finance the cash portion of the acquisition consideration from the more than $88 million of cash currently on-hand.” This includes $20 million of recent borrowings.
Based in Toronto, Canada, 7D Surgical created the Machine-vision Image Guided Surgery (MvIGS) system. Developed for both cranial and spinal navigation, the spine system allows surgeons to “perform fast, cost-effective, radiation-free spinal navigation.” The system also boasts 7D Surgical’s proprietary Flash™ Registration. The company claims that with its system, patient registration takes less than 20 seconds.
Analysts have viewed the acquisition positively, indicating that the acquisition makes strategic sense for SeaSpine.
In a note to investors, Wells Fargo analysts noted that the acquisition is important “given the highly competitive and fragmented spine market.” Furthermore, the acquisition “allows the company [SeaSpine] to gain better economics than the non-exclusive, co-marketing agreement that the company entered into with 7D [Surgical] in February 2020.”
Similarly, Ladenburg Thalmann & Co. Inc. analysts noted that with the acquisition, “the companies recognize a greater opportunity to commercialize the technology through a sales incentivized earn out which expands adoption, footprint, and product (both 7D [Surgical] and SPNE [SeaSpine]) utilization.”
OTW will continue to follow the companies as the transaction moves forward. The transaction is expected to close during the second quarter of 2021.
