Bacterin to buy X-Spine, rebrand as Xtant Medical in $86m deal

Bacterin (OTC:BONE) yesterday said it agreed to acquire spinal implant maker  X-Spine Systems in a cash-and-stock deal worth about $86 million, including the assumption of debt, and rebrand as Xtant Medical Holdings.

Belgrade, Mont.-based Bacterin, which makes allograft products using its in-house tissue bank, said the deal includes $60 million in cash, about 4.24 million Bacterin shares and the assumption of roughly $13 million in debt. At yesterday’s closing price of $3.17 apiece, the BONE shares would be worth about $13.4 million.

Bacterin said it plans to fund the deal with a $42 million debt facility with OrbiMed and $65 million in convertible senior notes. The majority of the spine surgery procedures addressed by X-Spine devices could also use Bacterin orthobiologics, the company said.

X-Spine, based in Miamisburg, Ohio, will become the hardware subsidiary for Xtant, Bacterin said. CEO Dr. David Kirschman, who’s slated to become Xtant Medical’s chief scientific officer and join its board, is also tabbed to lead the X-Spine Systems unit.

“This transaction joins 2 strong and growing organizations and reinforces the strategic initiatives outlined earlier this year to expand our product offerings, strengthen customer relationships and expand our distribution capabilities. We are excited to leverage further our combined operating platform and exceptional talent to drive, significant and ongoing value for our stockholders. With the addition of X-spine, we will have a stronger financial profile with over $80 million of revenue and positive EBITDA,” Bacterin CEO Dan Goldberger said in prepared remarks.

“We look forward to broadening our success through a combination with Bacterin and accessing their outstanding portfolio of regenerative medicine products. This transaction will increase the scope of our organization with a new, diversified portfolio of products focused on the orthopedic and spine markets. Furthermore, we will be able to offer those diversified products to our established customer base, representing an accessible revenue growth opportunity for the combined business. I look forward to working with Dan and his team to open the next chapter of our mutual success,” Kirschman added.

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