Alphatec (NSDQ:ATEC) said today it entered into an agreement with Globus Medical (NYSE:GMED) to sell its international operations and distribution channels for $80 million.
Alphatec said the deal includes a 5-year senior secured credit facility for up to $30 million from Globus Medical.
Alphatec said it plans to use portions of the cash offering to pay down its approximately $69 million of existing debt and debt-related costs. The Carlsbad, Calif.-based company said the funds, as well as a revolving line of credit from MidCap Financial will support its transition to a U.S. market based company.
“This transaction will provide Alphatec with a stronger balance sheet, better capital structure and improved cash resources. This enhanced liquidity will enable the company to support the continued expansion in the U.S. of our Arsenal degenerative system, Arsenal deformity system, Battalion universal interbody system and the launches of our new Battalion lateral system and XYcor expandable spinal spacer system, both of which we expect to launch later this year. We estimate that the U.S. constitutes nearly 65% of the world’s spinal fusion market. I would like to acknowledge and thank our great team of employees who have built a strong international business, and I am confident that our international employees will continue to thrive under Globus’ leadership,” Alphatec Spine CEO Jim Corbett said in a press release.
Through the deal, Globus will pick up all of Alphatec’s international distribution operations and agreements, including subsidiaries in Japan and Brazil and sales operations in the U.K. and Italy.
Alphatec is slated to supply products to Globus for up to 5 years as part of the agreement, and will not compete in the international market for the term of the supply agreement plus an additional 2 years.
Alphatec said closing conditions for the deal include entry into credit agreements with MidCap Financial and Globus, and the companies expect the deal to close by October 2016.
“We are grateful to the teams at MidCap Financial and Deerfield and appreciate the continued support that our financial partners have provided to Alphatec,” Corbett said in prepared remarks.
The post Alphatec deals international biz to Globus Medical for $80m appeared first on MassDevice.
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