Exactech, a maker of orthopedic implants, has entered into a comprehensive restructuring support agreement and asset purchase agreement with a group of its existing investors, pursuant to which the investor group will serve as the “stalking horse” bidder to acquire substantially all of the company’s assets. The investor group will support the company through the restructuring process, including by providing approximately $85 million of additional financing to fund the company’s operations.
Throughout the restructuring process, the company will continue to operate as normal, developing and providing medical devices and technologies to orthopedic surgeons and patients. The restructuring will relieve the company from non-operating legacy liabilities, facilitate an infusion of new capital and better position the business to execute on its mission to be the leading surgeon partner in orthopedics.
“Our team has delivered strong performance and positive growth in 2024, and we are confident in the trajectory of our business,” said Darin Johnson, President and CEO. “However, despite the strength of the underlying business, we face unsustainable liabilities associated with knee and hip litigation related to the packaging recalls we voluntarily initiated between 2021 and 2022. We take our commitment to patient well-being very seriously and have provided substantial out-of-pocket patient reimbursements and surgeon support for related expenses. The process we are commencing today is intended to help us create a stronger foundation for long-term growth with an improved balance sheet and new capital as well as ensure that we can continue providing innovative, industry-leading implants for surgeons and their patients for years to come.”
The sale is being conducted pursuant to a voluntary reorganization process in front of the United States Bankruptcy Court for the District of Delaware and is subject to higher and better bids, court approval and other customary closing conditions.
The company has filed a number of “first-day” motions seeking court approval to maintain ordinary course operations throughout the sale process, including the continued payment of employee wages and benefits, as well as payments to sales representatives. In addition, the Company will continue its research and development efforts during the process, ensuring its commitment to advancing its product portfolio.
The investor group is led by private equity and alternative asset management firms collectively representing more than $25 billion under management, with dozens of portfolio companies and extensive operational expertise, including in the medical technology and device manufacturing industries.
