SeaSpine acquisition of NLT Spine could be worth $53m

SeaSpine (NSDQ:SPNE) said yesterday that it agreed to acquire Israeli firm NLT Spine in a deal that could wind up being worth $52.5 million.

Kfar Saba, Israel-based NLT makes a line of minimally invasive spinal implants for lumbar fusion procedures that are designed to expand after implantation. The deal with Carlsbad, Calif.-based SeaSpine, which spun out of Integra LifeSciences (NSDQ:IART last year, calls for an up-front cash payment of $1 million and up to $43 million more in contingent payments pegged to sales of the NLT products. SeaSpine has the option of making a 1-time payment of $18 million after the deal closes in lieu of any further contingent payouts.

The deal also includes a provision for $3.5 million worth of SeaSpine shares once the FDA clears NLT’s Prow Fusion-L line and after Israeli officials sign off on the acquisition. Finally, there’s $5 million on the line in cash or stock pegged to a quartet of commercialization milestones.

“This transaction strengthens our future product offerings and broadens our growing portfolio of differentiated interbody solutions, 1 of the fastest-growing market segments within spine, while demonstrating to distributors and the surgeon community our commitment to innovation, including through strategic acquisitions,” SeaSpine president & CEO Keith Valentine said in prepared remarks. “The deal structure allows us to acquire differentiated assets with modest up-front investment, while deferring the majority of consideration to sales-based payments and commercially-based milestones. Equally important, it reflects the belief of NLT’s investors in both the potential of their technology and our ability to commercialize it successfully.”

“We’re pleased to add our line of products and technologies to SeaSpine’s comprehensive suite of offerings in the spine intervention market,” added NLT president & CEO Didier Toubia. “We see SeaSpine as the ideal group to bring to market and drive adoption of our innovative interbody spine solutions, which we believe will benefit patients and our shareholders, now and in the longer term.”

SeaSpine said the deal doesn’t change its guidance for 2016 revenue of $136 million to $140 million, with up to $1.7 million expected in acquisition costs this year.

Covington Assoc. advised NLT Spine, which raised $14.5 million in 20102 from Accelmed and Peregrine Ventures and an unnamed strategic investor.

NLT’s eSpin powered discectomy system won 510(k) clearance from the FDA in 2012.

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