Orthofix (Nasdaq:OFIX) and SeaSpine (Nasdaq:SPNE) today announced a definitive agreement to combine companies in an all-stock merger of equals.

Under the terms of the agreement, SeaSpine shareholders will receive 0.4163 shares of Orthofix common stock for each share of SeaSpine common stock owned. Once the transaction closes, Orthofix shareholders will own approximately 56.5% of the combined companies. SeaSpine shareholders will own approximately 43.5% of the combined company on a diluted basis, according to an SEC filing.

Both companies’ boards have unanimously approved the merger. They plan to close the transaction in the first quarter of 2023, naming the new combined company beforehand.

Shares in OFIX were down more than 20% to $14.60 apiece, and SPNE was up more than 4% to $5.81 apiece in by late afternoon trading. MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was down more than 1%.

BTIG analysts Ryan Zimmerman and Sam Durno were positive about the merger news: “We think that the merger between OrthoFix (OFIX) and SeaSpine (SPNE) solves some immediate problems for both companies, including refreshing OFIX’s spinal hardware and biologics portfolios, providing SPNE with immediate access to cash, and providing significant scale in a competitive market in which OFIX was underperforming.”

Orthofix and SeaSpine combined have products distributed in 68 countries, have approximately 1,600 employees and a global R&D and manufacturing footprint. The combined company would also have annual revenues of approximately $693 million when its fiscal year ends on September 30, 2022, according to an investor presentation today. Officials at the companies expect the combined business’ sales mix to be spinal implants and enabling technology (35%), bone growth therapies (27%), biologics (23%) and orthopedics (15%).

Within three years of the transaction closing, Orthofix and SeaSpine anticipate revenue to be in the range of $1 billion, according to an investor presentation today. They expect revenue growth CAGR in the double-digits range,

Orthofix is already the 10th largest orthopedic device company in the world, according to a recent MassDevice analysis. 

In addition, Orthofix and SeaSpine said the transaction is well-financed. They project $125 million of liquidity at closing, growing into an existing $300 million credit facility over time.

Merged company headquarters and CEO named

The new board of directors will have nine directors, five designated by Orthofix and four designated by SeaSpine. Orthofix’s current President and CEO Jon Serbousek will serve as the combined company’s executive chair of the board, and SeaSpine President and CEO Keith Valentine will become president, CEO and a board member. They’ll name the rest of the leadership team before the transaction closing, including representatives from both companies.

“This transaction brings together two complementary organizations to create an industry leader with the immediate financial strength to self-fund investments that deliver both growth and better patient outcomes. We are excited about the value we can create for the combined company’s shareholders, the new opportunities opened for employees and our ability to now provide surgeons and hospital partners a complete procedural solution using cutting-edge technology at every level,” Valentine said in a news release.

The combined company will be based in Lewisville, Texas, where Orthofix is currently headquartered. It will retain offices in Carlsbad, California. The Lewisville location will conduct general business, product development, medical education and manufacturing. Meanwhile, the Carlsbad location will focus on spinal product innovation and surgeon education.

A Verona, Italy-based office will also be retained with an emphasis on product innovation, production and medical education in orthopedics. The combined company plans to keep the current facilities in the following locations: Irvine, California; Toronto; Sunnyvale, California; Wayne, Pennsylvania; Olive Branch, Mississippi; Maidenhead, U.K; Munich; Paris and São Paulo, Brazil.

Orthofix, SeaSpine combined portfolios to create strategic market plans

Once combined, Orthofix and SeaSpine’s portfolios will offer a number of devices in the spine and orthopedics market segments, including the M6-C artificial cervical disc, the Flash navigation system for camera-based, machine-vision algorithmic imaging, Fitbone inter medullary limb lengthening system, Fitspine scoliosis device and many advanced interbody devices.

The two companies also have many biologics and regenerative technology offerings for use by surgeons in spine and orthopedic solutions.
SeaSpine’s 7D Flash surgical navigation system uses machine-vision algorithms and camera-based technology for cranial and spine procedures [Image courtesy of SeaSpine]




“This transaction significantly advances our mission to deliver innovative, quality-driven solutions that make us a partner of choice for surgeons in their work to improve patient mobility,” Orthofix President and CEO Jon Serbousek said in a news release. “The combined company’s broad portfolio of technology, expanded commercial capabilities and ability to make greater investments in innovative solutions provide a clear roadmap for sustainable, top-tier growth and increased competitiveness across a broad spectrum of products and services. We look forward to capitalizing on this merger’s tremendous value creation opportunities.”


Orthofix and SeaSpine said the merged companies will also have a complementary portfolio of specialized hardware that will enable the company to service the full patient continuum of care for pediatric orthopedic surgeons.

SeaSpine and Orthofix anticipate revenue synergies with cross-selling the portfolios in the U.S. and the ability to sell SeaSpine’s biologics and 7D technology in Orthofix’s internationally established markets. The deal will support large distributor conversions and increase product offerings per procedure, according to the companies.

The companies anticipate cost savings from reductions in redundant overhead, public company costs and supply chain efficiencies. It expects to generate at least $40 million in annualized cost savings, not including stock-based compensation, within three years following transaction closure. Economies of scale through higher spinal implant use will drive working capital and capital expenditure efficiencies for the combined company.