Companion Spine, a French-American company specializing in spine pain management, has finalized a definitive agreement to acquire key assets from Xtant Medical Holdings for a total of $19.2 million. This strategic move includes the purchase of the Coflex Interlaminar Stabilization device and the CoFix Posterior MIS fusion system, along with the entirety of Paradigm Spine’s business operations.
The transaction comprises $11 million in cash upon closing and $8.2 million in short-term seller financing. Xtant Medical plans to allocate the proceeds from this acquisition to reduce its long-term debt and enhance liquidity.
Transaction Details and Implications
The deal is expected to close in the third quarter of 2023, contingent on Companion Spine securing necessary financing and fulfilling other customary closing conditions. As part of the agreement, Companion Spine has already made a non-refundable cash deposit of $2.5 million. Should they require additional time for financing, they may make up to two further deposits of the same amount. At or before the closing date, Companion Spine will pay an additional $8.5 million and provide an unsecured promissory note for $8.2 million.
The Coflex and CoFix systems have been marketed in the United States for over 12 years and in international markets for 20 years. With this acquisition, Companion Spine aims to establish itself as a sole source provider of a comprehensive range of indication-specific products focused on dynamic stabilization and motion preservation implants. This strategic expansion is designed to enhance its capabilities in treating spine pain associated with lumbar and cervical diseases.
Leadership Insights and Future Plans
Advisors involved in the acquisition include Dorsey & Whitney as lead legal counsel, with additional support from McDermott Will & Emery on tax and German legal matters, and Farber on intellectual property concerns. For Xtant, Fox Rothschild provided legal counsel while LifeSci Partners served as the investor relations advisor.
Sean Browne, CEO and President of Xtant Medical, emphasized the significance of this transaction, stating: “This transaction is a significant step for us as we focus on our core business – the development of higher-margin, best-in-class orthobiologics – while also strengthening our balance sheet and streamlining our operations.” He expressed confidence that the Viscogliosi Brothers, who own Companion Spine, are well-equipped to drive the growth of these essential spinal technologies.
Previously, in 2023, Xtant Medical completed its own acquisition of the Coflex and CoFix product portfolio from Surgalign Holdings for $17 million. This latest transaction marks a pivotal point for both companies as they navigate the evolving landscape of spine care technology.
As Companion Spine moves forward with this acquisition, the company is positioned to enhance its offerings and potentially improve patient outcomes in spine pain management. The focus on innovation in spine treatment is essential as the demand for effective solutions continues to grow in the healthcare sector.
