Alphatec Holdings, the parent company of Alphatec Spine, has completed the sale of its international operations and distribution channel to Globus Medical. With the closing of the transaction, Alphatec is now focused solely on the US market.
The company has also recently obtained US clearance for its new XYcor expandable spinal spacer system, which it plans to launch later this year.
Globus acquired Alphatec’s international operations and distribution channel for a purchase price of US$80 million in cash. Globus will also provide Alphatec a five-year senior secured credit facility of up to US$30 million. In addition, Alphatec has entered into a supply agreement through which Alphatec will supply its products to Globus for up to five years.
As part of the closing of the transaction, Alphatec implemented the following related to this new capital structure:
- Drew down US$25 million of US$30 million credit facility from Globus upon closing;
- Paid off existing Deerfield credit facility balance and retired the credit facility;
- Reduced the MidCap Financial term loan to a US$5 million balance; and
- Reduced the MidCap Financial revolver commitment to US$22.5 million.
With this, Alphatec expects to have paid down approximately US$66 million of existing debt and debt-related expenses.
Concurrent with this transaction, Deerfield Management Company has used its cashless exercise provision under its warrant agreements, converting its warrants to purchase up to 11.45 million shares of common stock to approximately 3.2 million shares on a pre-reverse split basis. This will constitute approximately 269 thousand shares on a post-reverse split basis. On August 25, 2016 the company completed a one-for-twelve reverse stock split.
Mike O’Neill, Alphatec’s chief financial officer says, “The new term loan from Globus, in conjunction with a planned revolving line of credit from MidCap Financial, provides the company with credit facilities of up to US$57.5 million, which will offer sufficient liquidity and appropriate financing to successfully support Alphatec’s transition to a US market-based company. Upon closing, we estimate our total debt drawn will be approximately US$45 million. I would like to thank Deerfield who has been an excellent partner and we appreciate the support that they have provided to the company through the years. I am also pleased that MidCap will remain as a lender and provide funding for the company going forward. I want to thank them for their continued commitment and support to Alphatec.”