Audubon, Pa.-based Globus Medical will acquire Carlsbad, Calif.-based Alphatec Holdings' international device business.
Here are nine key insights:
1. Alphatec entered a definitive agreement to sell its international operations and distribution channel to Globus for $80 million.
2. Globus will take over Alphatec's wholly-owned subsidiaries in Japan and Brazil as well as the company's sales operations in the United Kingdom and Italy.
3. Alphatec agrees to supply Globus its products for up to five years, and will refrain from entering the international market during the term of the supply agreement plus two more years.
4. Per the transaction, Globus will offer Alphatec a five-year senior secured credit facility of up to $30 million.
5. Following the acquisition, Alphatec plans to pay $69 million of its debt and debt-related costs.
6. With Globus' term loan and a MidCap Financial revolving line of credit, Alphatec foresees a successful transition to a U.S.-based company.
7. Due to the transition, Alphatec expects to cut its operating expenses by $20 million over the next two years.
8. Alphatec anticipates its better liquidity will result in annual capital instrument investments hitting $10 million.
9. Alphatec and Globus expect to close the deal by October.
"This transaction will provide Alphatec with a stronger balance sheet, better capital structure and improved cash resources," said Jim Corbett, president and CEO, Alphatec Spine.