Transaction Enables MicroPort to Become Global Medical Device Company with Recognized Orthopedic Franchise to Commercialize in Rapidly Growing China Orthopedic Market
Purchase Price of $290 Million in Cash
SHANGHAI, China – June 25, 2013 – MicroPort Scientific Corporation (HK: 0853) and Wright Medical Group, Inc. (NASDAQ: WMGI) entered into a definitive agreement on June 18, 2013 under which MicroPort Medical B.V., a subsidiary of MicroPort Scientific Corporation, will acquire Wright's OrthoRecon business. The purchase price is $290 million and is payable in cash at closing, which is expected to occur by the end of the third quarter or during the fourth quarter of 2013.
Wright's OrthoRecon business includes hip and knee implant products and generated global revenue of approximately $269 million in 2012. The OrthoRecon business has established hip and knee franchise brands including DYNASTY® and CONSERVE® hips, PROFEMUR® modular stems, SUPERPATH™ minimally invasive hip surgical instrumentation, and ADVANCE® and EVOLUTION® medial-pivot knee implants. According to industry research, the worldwide hip and knee reconstruction market was approximately $14 billion in 2012. In addition, the China hip and knee implant market is estimated to be approximately $1.3 billion by 2018 and is growing at approximately 17% per year.
Mr. Hongbin Sun, Chief Financial Officer of MicroPort Scientific Corporation and the Executive Director of the MicroPort Orthopedic business stated, "The acquisition of Wright's OrthoRecon business will enable us to significantly expand our orthopedic business from both product and geographic perspectives. It will be highly complementary to our existing spine and trauma platforms. Wright Medical's new generation EVOLUTION® Medial-Pivot Knee product is recognized as a best-in-class product globally, with a design that is considered by some physicians as being anatomically very suitable for Asian patients. Its SUPERPATH™ minimally invasive hip replacement instruments are a dedicated minimally invasive surgical product requiring only a small open wound and significantly reducing patient recovery time. Wright Medical's OrthoRecon business will become an important addition from which our orthopedic business can continue to grow."
Dr. Zhaohua Chang, Chairman and Chief Executive Officer of MicroPort Scientific Corporation commented, "This acquisition will be a key milestone in the development of MicroPort's orthopedic business, and will become an important stepping stone in MicroPort's global development strategy. We recognize that Wright's OrthoRecon business has a unique and important position in the global orthopedic industry, and throughout its 60+ year history, has served the medical community well with various innovative products. We look forward to adding Wright's portfolio of high-quality, clinically proven hip and knee products and welcoming their talented OrthoRecon team to our organization to support our continued expansion into fast-growing Asian markets and elsewhere around the world. We are eager to working closely with the existing OrthoRecon management, employees and stakeholders to substantially grow the OrthoRecon business and gear it up to a higher level. With this acquisition as well as through continued organic growth, MicroPort is becoming a true global enterprise with bases in China, USA, Europe and elsewhere in the world to serve a much larger patient populations with high quality and innovative medical products that are affordable to all."
Mr. Robert Palmisano, President and Chief Executive Officer of Wright Medical, stated, "We are pleased we have found an excellent strategic buyer in MicroPort, a company that is deeply committed to the success of the OrthoRecon business and will continue to provide the focus and investment to enable it to reach its full potential. Also, very importantly, this will provide our OrthoRecon employees with opportunities for career growth and development. We are grateful to our OrthoRecon employees for their dedication and hard work, and we look forward to working with MicroPort to ensure a seamless transfer and the continued success of the OrthoRecon business as part of MicroPort."
Post close, MicroPort's global orthopedic business will be headquartered in current OrthoRecon location in Arlington, Tennessee, United States.
The transaction is subject to customary closing conditions, including MicroPort shareholder approval and receipt of regulatory clearances. The transaction received the approval of the board of directors of both MicroPort and Wright. In addition, voting undertakings have been given by shareholders of MicroPort holding greater than the required voting shares needed to approve the transaction.
In connection with this transaction, BofA Merrill Lynch and Morrison & Foerster LLP advised MicroPort Scientific Corporation.
About Wright Medical
Wright Medical Group, Inc. is a global orthopedic company that that provides solutions that enable clinicians to alleviate pain and restore their patients' lifestyles. The company is the recognized leader of surgical solutions for the foot and ankle market and markets its products in over 60 countries worldwide.