Healthcare Industry News: Fixation System
News Release - March 5, 2007
Wright Medical Announces Agreement to Acquire Reconstructive Foot Surgery Business of DARCO International, Inc.
Acquisition Substantially Expands Wright's Foot and Ankle Reconstructive PortfolioARLINGTON, TN--(HSMN NewsFeed)--Wright Medical Group, Inc. (NASDAQ: WMGI ), announced today that it has signed a definitive agreement to acquire substantially all the assets of Darco International, Inc.'s reconstructive foot surgery line of business for approximately $17 million in cash.
Darco's reconstructive product line consists of a broad offering of procedure specific plating systems designed with leading foot surgeons, including the MRS (Modular Rearfoot), MFS (Modular Forefoot) and FRS (Forefoot Reconstructive) Systems. These three systems offer a combined ten different plating options and specialized screw Fixation Systems for use in advanced reconstructive foot procedures. Darco's reconstructive foot surgery business generated net sales of approximately $6 million in 2006 with the majority of these sales occurring in Germany where Darco is the market leader in foot and ankle reconstructive implants. Wright intends to introduce the entire DARCO® foot and ankle product portfolio to the U.S. market upon completion of this transaction. The combination of Darco's procedure specific plating systems with the Company's line of products and biologic solutions provides Wright with the broadest portfolio of foot and ankle products in the industry.
Gary D. Henley, President and Chief Executive Officer commented, "The acquisition of the DARCO® line is an excellent strategic fit with our foot and ankle franchise. It significantly expands our worldwide portfolio of reconstructive foot and ankle products, provides an opportunity to leverage our distribution network both within and outside the U.S., and establishes a leading foot and ankle presence for Wright in the large and robust German marketplace. The combination of these procedure-specific plating systems from Darco with our flagship CHARLOTTE(TM) line creates what we believe will be the most comprehensive foot reconstructive product offering available."
Darrel Darby, President of Darco, commenting on the acquisition noted, "Wright Medical's strong reputation and experience in foot and ankle reconstruction make it the ideal owner for the DARCO® reconstructive product line. Through Wright Medical, even greater numbers of surgeons and patients will have access to the benefits of the DARCO® family of reconstructive products."
This acquisition is expected to be neutral to Wright's adjusted earnings, which exclude acquisition-related costs such as integration charges and non-cash inventory step-up expenses, during the remainder of 2007, and accretive to Wright's earnings thereafter. Following the closing of this transaction, which we expect to occur in the early part of the second quarter, we expect to provide more detailed guidance regarding the financial aspects of the transaction and its expected impact on Wright's future financial results.
About Wright Medical Group
Wright Medical Group, Inc. is a global orthopaedic medical device company specializing in the design, manufacture and marketing of reconstructive joint devices and biologics. The Company has been in business for more than 50 years and markets its products in over 60 countries worldwide.
About Darco International
Darco International, Inc. is a privately held U.S. company focused on providing surgical, trauma and wound care solutions to the global foot and ankle community.
Safe-Harbor Statement
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements made in this press release, other than statements of historical fact, are forward-looking statements. Forward-looking statements reflect management's current knowledge, assumptions, beliefs, estimates, and expectations and express management's current views of future performance, results, and trends. The Company wishes to caution readers that actual results might differ materially from those described in the forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, including the factors discussed in the Company's filings with the Securities and Exchange Commission (including the Company's annual report on Form 10-K for the year ended December 31, 2006 under the heading, "Risk Factors" and its quarterly reports), which could cause the Company's actual results to materially differ from those described in the forward-looking statements. Although the Company believes that the forward-looking statements are accurate, there can be no assurance that any forward-looking statement will prove to be accurate. A forward-looking statement should not be regarded as a representation by the Company that the results described therein will be achieved. The Company wishes to caution readers not to place undue reliance on any forward-looking statement. The forward-looking statements are made as of the date of this press release. The Company assumes no obligation to update any forward-looking statement after this date.
Source: Wright Medical
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