-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Smkl3A4iRmyDK5mGCLerKkgPGznirTDQMTXKsgylUadVwWZ7mWaNnQsQnknET+nC t+pN+rXOK16tVXLsCVkn1Q== 0000947871-03-002560.txt : 20031126 0000947871-03-002560.hdr.sgml : 20031126 20031125195329 ACCESSION NUMBER: 0000947871-03-002560 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031121 ITEM INFORMATION: Other events FILED AS OF DATE: 20031126 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORTHOFIX INTERNATIONAL N V CENTRAL INDEX KEY: 0000884624 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19961 FILM NUMBER: 031024334 BUSINESS ADDRESS: STREET 1: 7 ABRAHAM DE VEERSTRAAT STREET 2: CURACAO CITY: NETHERLANDS ANTILLES STATE: P8 ZIP: 00000 8-K 1 f8k_112103.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ----------------------------- Date of Report (Date of earliest event reported): November 20, 2003
Orthofix International N.V. (Exact name of Registrant as specified in its charter) Netherlands Antilles 0-19961 N/A (State or other jurisdiction Commission File Number (I.R.S. Employer of incorporation) Identification Number)
----------------------------- 7 Abraham de Veerstraat Curacao Netherlands Antilles 011-59-99-465-8525 (Address of principal executive offices and telephone number, including area code) ----------------------------- Item 5. Other Events and Regulation FD Disclosure ----------------------------------------- The following information is filed pursuant to Item 5, "Other Events and Regulation FD Disclosure." On November 20, 2003, Orthofix International N.V. ("Orthofix") and Trevor Acquisition Inc., an acquisition subsidiary of Orthofix ("Trevor"), entered into an acquisition agreement with BREG, Inc. ("BREG") and a representative of the shareholders of BREG, pursuant to which Orthofix has agreed to acquire BREG for a purchase price of $150 million in cash, subject to certain adjustments and subject to the agreements to purchase Orthofix common stock described below. Under the acquisition agreement, Trevor will merge with and into BREG, with BREG continuing as the surviving corporation, which will become an indirect wholly owned subsidiary of Orthofix. The acquisition agreement contains customary representations and warranties, covenants and other terms and various closing conditions, including finalization of financing, approval of BREG shareholders, governmental approval and other customary closing conditions. Also on November 20, 2003, Orthofix entered into a voting and subscription agreement with certain significant shareholders of BREG. Pursuant to the voting and subscription agreement, such shareholders have agreed, among other things, to vote their shares of BREG common stock in favor of the acquisition agreement and the merger, and to apply a portion of their proceeds from the merger to purchase up to 731,725 shares of Orthofix common stock valued at approximately $27.8 million. These shareholders represent approximately 76% of the outstanding shares of BREG. Concurrently with the closing of the acquisition, and as a condition to such closing, Colgate Medical, Ltd., an indirect wholly owned subsidiary of Orthofix ("Colgate"), will enter into a new senior secured bank facility with a syndicate of financial institutions led by Wachovia Securities. The senior secured bank facility is expected to provide for (1) a five-year amortizing term loan facility of $110 million, the proceeds of which will be used for partial payment of the purchase price of BREG and (2) a five-year revolving credit facility of $15 million. Orthofix will guarantee the obligations of Colgate under the senior secured bank facility. The credit agreement will contain certain negative covenants applicable to Colgate and its subsidiaries, including restrictions on indebtedness, liens, dividends, mergers or sales of assets. The credit agreement will also contain certain financial covenants, including a fixed charge coverage ratio, an interest coverage ratio and a leverage ratio applicable to Colgate, and a leverage ratio applicable to Orthofix. Finally, the credit agreement will contain customary representations and warranties and various closing conditions, including financial conditions. A copy of the press release is attached hereto as Exhibit 99.1 and Orthofix hereby incorporates such exhibit herein by reference. Exhibit 99.1 Orthofix International N.V. Press Release dated November 20, 2003. Signature Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: November 25, 2003 ORTHOFIX INTERNATIONAL N.V. By: /S/ THOMAS HEIN --------------------------------- Name: Thomas Hein Title: Chief Financial Officer EX-99.1 3 ex99-1tof8k_112103.txt PRESS RELEASE [GRAPHIC OMITTED][GRAPHIC OMITTED] FOR IMMEDIATE RELEASE Contact: Charles W. Federico, Group President and CEO, Orthofix Inc., 704/948-2600 Thomas Hein, CFO, Orthofix Inc., 704/948-2600 Orthofix (OFIX) announces agreement to acquire BREG, Inc. Acquisition expected to be significantly accretive Investor conference call tomorrow (Friday) at 11:00 a.m. Eastern Time "This acquisition is but the first step in our strategy to fortify and expand our franchises in the three key sectors in orthopedics: spine, reconstruction, and trauma." Charles Federico, Group President and CEO Orthofix International, N.V. HUNTERSVILLE, N.C./VISTA, Calif., Nov. 20, 2003 - Orthofix (Nasdaq: OFIX) announced today that it has signed a definitive agreement to acquire privately held BREG, Inc. -- based in Vista, California, and a market leader in the sale of orthopedic postoperative reconstruction and rehabilitative products to hospitals and orthopedic offices -- for the purchase price of $150 million, to be paid with a combination of cash and Orthofix common stock. Financing for the transaction will include: $110 million of debt, cash on hand, and Orthofix common stock valued at $27.8 million. The acquisition is subject to finalization of financing, approval of BREG shareholders, governmental approval and other customary closing conditions. It is Orthofix's intention to complete the acquisition by the end of the year. Orthofix has received a commitment for the senior secured bank financing for the acquisition from Wachovia Securities.1 Wachovia Securities also acted as financial advisor to Orthofix. "This acquisition is but the first step in our strategy to fortify and expand our franchises in the three key sectors in orthopedics: spine, reconstruction, and trauma. Consequently, we believe this acquisition is not only an outstanding strategic fit but also will be accretive to Orthofix's revenues, cash flow and earnings growth in 2004 and going forward," said Charles W. Federico, Group President and Chief Executive Officer of Orthofix. The combined company is expected to generate approximately $292 million in total revenues in 2004, with earnings per share (EPS), subject to a final purchase price allocation, of approximately $2.60 on a projected 15.6 million diluted shares (See Table 1, "Projected Post-Acquisition Combined Revenue by Sector"). For the twelve-month period ended September 30, 2003, BREG generated $58.3 million in revenues and $7.7 million in net income. "The proposed acquisition broadens our product lines, reducing our reliance on the success of any single product, and enlarges channel opportunities for Orthofix almost immediately -- we now become a distribution leader in the office-based and post-operative markets, and will seek opportunities for cross- selling products as opposed to sales force integration and reductions. Any emerging-technology firm looking for distribution into the office-care environment will see Orthofix as an excellent strategic partner," said Federico. "Now, with this acquisition, Orthofix has one of the largest sales forces calling on the orthopedic office." "Orthofix now has a unique profile within the orthopedic industry: a large and growing company, with projected 2004 combined revenues approaching $300 million; a company with the ability to be opportunistic, as evidenced by the proposed acquisition of BREG; a very profitable company with well-diversified product lines, some of which rely on `high tech' as a competitive advantage competing in growing markets in which Orthofix has strong distribution," said Federico. "This moves Orthofix toward being more similar to the larger orthopedic companies. "Beyond the strategic fit and potential synergies of this acquisition," concluded Federico, "the acquisition also enhances our already strong cash flow. Furthermore, from a purely financial point of view, the real beauty of this acquisition is the beneficial EPS effect: it accelerates what already was expected to be a strong EPS performance." Added Brad Mason, CEO of BREG: "Having known Charlie and his senior management team for nearly twenty years and having worked closely together for the past two years, we know Orthofix is an outstanding partner. In addition to the strategic benefits, we are particularly excited about the sales opportunities outside of the United States, which currently accounts for only seven percent of our sales. With Orthofix's international infrastructure, we should see a positive effect going forward." Table 1 Projected Post-Acquisition Combined Revenue by Sector: (in millions) Projected 2004 Spinal $ 58.0 Reconstruction 117.0 Trauma 95.0 Other 22.0 ---- Total Revenue $ 292.0 In connection with the transaction and contingent upon closing, certain employees of BREG, including Brad Mason and William Hopson, CFO of BREG, have entered into employment agreements with Orthofix. In addition, upon closing, Messrs. Mason and Hopson will receive 150,000 and 50,000 performance accelerated stock options, respectively, which will vest after four years, although a portion of such options will be eligible for accelerated vesting if certain market price targets of Orthofix common stock are satisfied. The options will be granted by Orthofix in reliance on the NASD exception to shareholder approval for equity grants to new hires. INVESTOR CONFERENCE CALL: Orthofix will host a conference call to discuss this acquisition and related matters. The conference call will be held tomorrow (Friday, Nov. 21, 2003) at 11:00 A.M. (Eastern Standard Time), 8:00 A.M. (Pacific Standard Time) and 4:00 P.M. (Greenwich Mean Time). Approximately 10 minutes before the start of the call, investors based in North America who wish to participate 'live' must dial 800-215-1640. Participants outside of North America must dial 212-346-6420 and cite reservation number 21166564. In addition, the call will be audiostreamed 'live' at www.orthofix.com. For those unable to participate 'live', a recording of the conference call will be available from 1:00 P.M. (ET), Nov. 21, 2003, until 1:00 PM (ET), Nov. 25, 2003. Callers based in North America should dial 800-633-8284. Callers outside of North America should dial 402-977-9140 and cite reservation number 21166564. Orthofix International, N.V., a diversified orthopedic company, offers a broad line of minimally invasive surgical, as well as non-surgical, products for the spine, reconstruction, and trauma market sectors that address the lifelong-bone-and-joint-health needs of patients of all ages -- making possible a more active and mobile lifestyle. Orthofix's products are widely distributed around the world to orthopedic surgeons and patients -- via Orthofix's 380 sales representatives, and via partnerships with other leading orthopedic product companies, such as Medtronic Sofamor Danek, Stryker Howmedica, Kendall Healthcare and Royce Medical. In addition, Orthofix is collaborating in R&D partnerships with leading medical institutions such as the Wake Forest University School of Medicine, the Orthopedic Research and Education Foundation, the Cleveland Clinic Foundation, Innovative Spinal Technologies and the National Osteoporosis Institute. For more information about Orthofix, please visit www.orthofix.com. FORWARD-LOOKING STATEMENTS: This communication contains certain forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which may include, but are not limited to, statements concerning the projections, financial condition, results of operations and businesses of Orthofix and BREG and the benefits expected to result from the contemplated transaction, are based on management's current expectations and estimates and involve risks and uncertainties that could cause actual results or outcomes to differ materially from those contemplated by the forward-looking statements. Factors that could cause or contribute to such differences may include, but are not limited to, the risk that the conditions relating to regulatory clearance might not be satisfied in a timely manner or at all, risks relating to the integration of the businesses of Orthofix and BREG, unanticipated expenditures, the final terms of the financing of this acquisition, changing relationships with customers, suppliers and strategic partners, risks relating to the protection of intellectual property, changes to the reimbursement policies of third parties, changes to governmental regulation of medical devices, the impact of competitive products, changes to the competitive environment, the acceptance of new products in the market, conditions of the orthopedic industry and the economy and other factors described in the most recent reports on Form 10-Q, most recent reports on Form 10-K and other periodic reports filed by Orthofix with the Securities and Exchange Commission. ##### - ------------------ 1 Wachovia Securities is the trade name for the corporate and investment banking services of Wachovia Corporation and its subsidiaries, including Wachovia Capital Markets, LLC, member NYSE, NASD, SIPC. -----END PRIVACY-ENHANCED MESSAGE-----