RTI Surgical to Acquire Paradigm Spine for $300 Million to Expand Spine Portfolio

VCBeat (WeChat ID: vcbeat) has learned that on November 1, 2018, local time, RTI Surgical (hereinafter referred to as “RTI”), a globally renowned surgical implant company, and Paradigm Spine, a leader in the field of non-fusion spinal implants, jointly announced that they had entered into a definitive agreement under which RTI would acquire all outstanding shares of Paradigm Spine for cash and stock valued at up to $300 million. The deal includes a closing payment of $150 million and potential future milestone payments. RTI believes that this transaction highlights significant progress in its strategic transformation, with positive implications for reducing operational complexity, enhancing operations, and accelerating growth.

Under the terms of the agreement, RTI will pay Paradigm Spine $100 million in cash and more than 10.72 million shares of RTI common stock, valued at approximately $50 million. Potential future milestone payments will be made in a combination of cash and RTI common stock. The share price for this transaction will be priced based on the volume-weighted average closing price of RTI’s stock during the five business days prior to the closing of the transaction. The transaction has been approved by the Board of Directors of RTI and the Board of Managers of Paradigm Spine and is expected to close in the first quarter of 2019.

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Paradigm Spine, founded in 2005, is a privately held medical device company. Its flagship product is the coflex interspinous implant, designed for the treatment of facet joint disease and as an adjunct to decompression surgery. The device has received FDA PMA approval for the treatment of moderate to severe lumbar spinal stenosis (LSS). LSS is currently the most prevalent spinal disorder among the elderly population in North America, affecting approximately 1.6 million patients annually. The total market valuation is nearly $3.3 billion.

Backed by 12 years of clinical data, coflex has gained recognition from major spinal societies, including the North American Spine Society (NASS) and the International Society for the Advancement of Spine Surgery (ISASS). These organizations concur that coflex can shorten patients’ recovery time and improve prognosis. coflex has achieved nationwide Medicare coverage in the United States, and the company is currently pursuing expanded market coverage in additional regions and within the private-pay sector.

Marc Viscogliosi, Chairman and Chief Executive Officer of Paradigm Spine, stated, “Over the past few years, we have been dedicated to establishing coflex as the preferred treatment option for orthopedic spine surgeons and neurosurgeons. We believe that this therapy is on the verge of accelerated growth, driven by expanded coverage in the private-pay sector and improved patient access.”

RTI President and CEO Camille Farhat stated that RTI’s growth strategy in the spine sector is to invest in differentiated products and build scale. The addition of Coflex will strengthen customer retention, support the product portfolio, and enhance their overall spine offerings.

RTI Surgical, founded in 1998 and headquartered in Florida, USA, is a globally leading surgical implant company that primarily provides surgeons with safe biological, metallic, and synthetic implants. Its products are used in more than 40 countries, covering fields such as sports medicine, general surgery, plastic surgery, and trauma surgery. The company operates four manufacturing facilities in the United States and Europe.

Paradigm Spine, founded in 2005 and headquartered in New York, USA, is a privately held medical device company focused on designing and developing solutions for the management of spinal stenosis. The company’s flagship product is the coflex spinal implant, which has been introduced in more than 40 countries worldwide.