SeaSpine Acquires Israeli Spine Technology For Estimated 52.5M
SeaSpine has acquired Israeli medtech NLT and its platform of minimally invasive fusion technologies for degenerative spine disease. SeaSpine CEO Keith Valentine remarked that the deal, potentially worth $52.5 million in cash and stock, marks the newly spun-off company’s commitment to innovation through acquisition.
Integra Life Sciences spun off its spine business into a separate company — SeaSpine — in a deal that was finalized last July. The spin off was part of a multi-year transformation strategy Integra launched in 2012, with the belief that both companies would grow faster apart than together. Valentine was appointed as CEO last April, after serving for 7 years as COO of NuVasive.
The acquisition of NLT marks SeaSpine’s first big deal since the company was formally launched. SeaSpine will pay an initial $1 million in cash, to be supplemented with contingent asset purchase payments based on percentages of the company’s future sales, but not to exceed $43 million. Additional contingent payments of $5 million in cash and $3.5 million in stock were offered if NLT products meets specified commercial and regulatory milestones. According to an SEC filing, SeaSpine retains the option to terminate obligation to contingency payments by making a one-time cash payment of $18 million upon initial closing.
The deal structure allows SeaSpine “to acquire differentiated assets with modest upfront investment, while deferring the majority of consideration to sales-based payments and commercially based milestones,” said Valentine in a press release. Acquisition-related costs for 2016 are estimated at just $1.7 million.
One of the agreement conditions includes the FDA’s approval of the Prow Fusion-L system, a lateral intervertebral fusion (IBF) device. NLT’s Prow Fusion implant technology is designed to allow smaller incisions upon insertion, but once in place, the implant expands to provide greater footprint and stability. Smaller incisions reduce the amount of nerve retraction required and speed recovery times for patients. Both NLT’s second-generation Prow Fusion and eSpin solutions for lumbar spine procedures were approved for the U.S. market in 2013.
Valentine remarked that the transaction would broaden SeaSpine’s existing portfolio of interbody solutions, which he said was one of the fastest growing business segments in the spine market, while “demonstrating to distributors and the surgeon community our commitment to innovation.”
“We are pleased to add our line of products and technologies to SeaSpine’s comprehensive suite of offerings in the spine intervention market,” said NLT President and CEO Didier Toubia. “We see SeaSpine as an 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’s present portfolio includes a suite of orthobiologics and spinal hardware solutions for lumbar, thoracic, and cervical spine procedures.