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Wright Medical to merge with Tornier in all-stock deal
Tuesday 28 October 2014

28 October 2014 - US orthopaedic medical device company Wright Medical Group Inc (NASDAQ:WMGI) and Dutch peer Tornier NV (NASDAQ:TRNX) announced the entry into a definitive agreement to merge in an all-stock deal, creating a new company valued at around USD3.3bn (EUR2.6bn).

Under the terms of the deal, each Wright share will be exchanged for 1.0309 shares of Tornier, giving Wright shareholders an about 52% stake in the enlarged company, with Tornier shareholders holding the remainder. The deal, which has been approved by both boards, hinges on customary closing conditions, including the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, as well as approval of Wright and Tornier shareholders. TMG Holdings Cooperatief UA, an affiliate of US private equity investment company Warburg Pincus LLC, which owns an around 22% stake in Tornier has provided its support for the transaction. Closure is expected to take place in the first half of 2015, the parties said.

After the merger, the new organisation, which will be incorporated in the Netherlands, will be called Wright Medical Group NV. The US headquarters of the enlarged company will be located in Memphis, Tennessee, where Wright is currently based. Wright president and CEO Robert Palmisano will assume the same position within the combined entity, while Tornier president and CEO David Mowry will serve as executive vice president and COO, according to the statement.

Pairing the capabilities of Wright and Tornier will create a company that will be well-positioned in the orthopaedics upper extremities, lower extremities and biologics orthopaedics areas, the firms noted. According to the press release, the new company will have the benefits of combined direct sales and distribution networks and will gain diversity and scale across a range of geographies and product categories. Cost synergies from the combination are expected to be between USD40m and USD45m and are anticipated to be fully realised by the third year after closure, the press release said.

JP Morgan Securities LLC and Perella Weinberg Partners LP are providing financial advice to Wright, while Ropes & Gray LLP is serving as its legal advisor. BofA Merrill Lynch is acting as financial advisor to Tornier and Willkie Farr & Gallagher LLP and Oppenheimer Wolff & Donnelly LLP are providing legal advice.
Details
Date Published: 28/10/2014
Country: Netherlands, USA
Sector: Healthcare
Type: Merger
Financing: All-stock
Status: Agreed
Deal Advisor: JP Morgan Securities LLC
Comment:
The combined company will be valued at USD3.3bn.

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