TranS1 has announced that it has entered into a definitive agreement to acquire Baxano, which manufactures and markets the iO-Flex system used in standard spinal decompression surgery and is developing the iO-Tome system (a precision facetectomy instrument).
Under the terms of the merger agreement, TranS1 will issue approximately 10.4 million shares of TranS1 common stock and pay $550,000 of cash to acquire Baxano. TranS1 will also refinance $3.0 million of existing debt of Baxano in the transaction at closing. On a pro forma basis, prior to the financing transaction discussed below, current TranS1 shareholders will own approximately 72.4% of the combined company and approximately 27.6% will be owned by current Baxano shareholders. The final number of shares will be subject to certain adjustments at closing. The merger transaction is currently expected to close early in the second quarter of 2013 and is subject to TranS1 shareholder approval and customary conditions to closing as detailed in the merger agreement.
“We believe that Baxano is a complementary strategic fit for our product portfolio,” said Ken Reali, president and chief executive officer of TranS1. “Minimally invasive treatments are the fastest growing segment of the spine market. The combination of our AxiaLIF and VEOTM lumbar fusion products with Baxano’s iO-Flex and iO-Tome systems for lumbar direct decompression and facetectomy, respectively, will allow us to better meet the needs of our spinal surgeon customers. This merger will create a unique company with the vision of being a leader in providing less invasive and minimally invasive solutions for spine disorders.”
“We are enthusiastic about the combination of Baxano with TranS1,” said Tony Recupero, President and Chief Executive Officer of Baxano. “We believe the combined company will have a compelling set of minimally invasive products to benefit patients, surgeons, hospitals and payors and will continue to build on the positive sales momentum we have built at Baxano over the past few years.”