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RTI Surgical announced a definitive agreement for the sale of the company’s OEM business to Montagu Private Equity LLP, a European private equity firm. The deal includes $480 million in cash and other considerations that bring the transaction total to $490 million with a targeted close date in the first half of 2020.
Montagu Private Equity focuses on buyouts of companies in stable and growing sectors. The firm currently manages assets of approximately €4.3 billion across over 400 investments made in the last 50 years.
RTI’s OEM segment addressed specialty and niche surgical hardware and implants developed and manufactured for customers including Medtronic, Stryker and Zimmer Biomet. For the full year 2019, RTI expects OEM segment revenues of approximately $189 million and global spine segment revenues in the range of $118 million to $119 million. Per company President and CEO Camille Farhat, RTI Surgical will be debt-free with $175 million to $200 million in cash after the transaction closes.
The unburdened balanced sheet will drive further growth of the company’s Novel Therapies segment that includes the coflex Interlaminar Stabilization and SImmetry SI joint fusion devices. coflex in particular will benefit from additional focus and resources, as it finished 3Q19 with softer than expected sales that played a role in RTI Surgical downgrading their 2019 revenue guidance by $20 million to a range of $305 million to $310 million.
Other technologies in RTI’s spine portfolio include Fortilink interbody fusion devices that feature TETRAfuse 3D-printed polymer, Streamline spinal fixation for cervical to lumbar applications and the CervAlign Anterior Cervical Plate, among others. In 2Q19, RTI announced a milestone of 5,000 implants of Fortilink-C, -TS and -L IBF Systems with TETRAfuse 3D Technology in the U.S.
In spine, the company expects to launch a minimum of 10 new product introductions during each of the next two years.
Biologics that accompany RTI’s spine products include ViBone viable bone matrix and nanOss bone graft substitutes. as well as a variety of demineralized bone matrix formats.
