02 Mar Alphatech Holdings Acquires EOS Imaging to Offer a Transformative Spine Surgery Experience
Alphatec Holdings (NASDAQ: ATEC), a medical technology company developing novel surgical products for treatment of spine disorders, announced the signing of an agreement to acquire EOS imaging, SA (EPA: EOSI), a leader in orthopedic medical imaging and software solutions, in a deal involving cash and equity.
As per the agreement Alphatec will pay up to $88 million, plus debt retirement of $33.9 million to acquire EOS’s reputed low dose, biplanar full-body imaging and 3D modeling capabilities. The deal is expected to not only enhance Alphatec’s revenue base but also create cross-selling opportunities through synergies of scale. The significant increase in customer base and sales network are expected to create a combined entity that can offer highly differentiated end-to-end solutions in the global spine surgery market. In addition, the Company expects the deal to be accretive to revenue, revenue growth, adjusted EBITDA and free cash flow in the first full year of operations following the transaction close.
Pat Miles, Chairman and Chief Executive Officer, stated,”
This is a monumental transaction for ATEC. While spine’s large players are investing in enabling technologies, we are thinking differently. We created a conduit to deliver information into the operating room with AlphaInformatiX. This transaction will integrate spine imaging and anatomical modeling onto the platform to actually inform the operative experience. By pairing ATEC’s approach-based solutions with imaging founded on Nobel Prize-winning technology, we expect to significantly increase demand for ATEC hardware and EOS systems and create a formidable competitive advantage”.
EOS is considered a path breaking technology that has enabled calibrated full body imaging that facilitates a better understanding of anatomical angles and dimensions. This result in improved diagnosis enhanced surgical goal fulfillment and post-operative assessment. Furthermore it will also complement Alphatec’s AlphaInformatiX platform, by enabling customized patient-specific implants, planning, intra-operative and alignment reconciliation. Most importantly EOS has an installed base of more than 350 imaging systems, with presence in 9 of the top 10 U.S. hospitals, and 20 of the top 25, besides a significant international footprint.
Alphatec Holdings (NASDAQ: ATEC)
Market Cap: $358.97M; Current Share Price: 5.85 USD
Data by YCharts
The increasing incidents of Spinal Cord Injuries (SCI) and the advancement of technology in the Spinal Injuries market will drive the growth in the Spinal Implants and Surgical devices market as per a report by Markets and Markets. The market is projected to reach $17.27 billion by 2021, growing at a CAGR of 5.3%.
SCI’s alone cost an estimated $40.5 billion annually in terms of healthcare costs; about $158 billion is spent on home care and nursing home services combined, with friends or family members providing care that is valued at $306 billion annually.
According to a report by the National Spinal Cord Injury Statistical Center, the number of people living with SCI’s is estimated to be approximately 288,000 persons, with a range from 247,000 to 358,000 persons, with the annual incidence of spinal cord injury estimated to be between 54 cases per one million people in the United States, or about 17,700 new SCI cases each year.
The global spinal cord trauma market which was valued at $2.28 billion in 2017 is projected to reach $3.04 billion by 2025 with a CAGR of 3.7 percent according to a report by Persistent Market Research. The increasing incidences of spine related injuries owing to motor accident, workplace injuries, stroke and cancer related motor disability along with hyperextension of the spine and vertebral dislocation will spur the growth in the market.
Increasing regulatory support to reduce SCI’s coupled with scientific advancements in the market as well as stem cell research will help the market grow. However the economic burden of the disease and lack of insurance coverage is a major challenge for those suffering from SCI, making it difficult for them to seek and adapt technological advancements in the field.
Alphatec is a medical technology company focused on revolutionizing spine surgery through organic innovation. The company’s primary growth drivers are spine focus, strategic sales force and Organic Innovation. The Company realigned its strategy to create a spine-focused innovation machine, and created in house-capabilities such as Cadaver lab evaluation, testing, development, design and product specifications.
The Company launched 12 new products in 2019 and overhauled its innovation and sales team, with the aim of invigorating its outlook for future, including efforts to improve revenue growth and revenue per surgery. Alphatech’s aim is to create clinical distinction by creating cutting-edge products that transform surgical experience and lead to a compelling surgeon adoption through revitalization of sales channel.
Alphatec is adapting diverse approaches to lateral surgery covering areas such as information dissemination with its AlphaInformatiX, implants such as IdentiTi that offer better fusion and imaging and Fixation devices that provide simplicity and compatibility. In addition its SafeOP is the first technology to automate nerve identification and nerve integrity in lateral surgery.
The company’s product portfolio consists of interbody implants, fixation and biologics under the brand name IndentiTi, AlphaGraft, Invictus, AMP, Trestle Luxe II and SafeOp Neuromonitoring, covering spine surgery approaches such as Anterior Cervical Discectomy Fusion(ACDF), Posterior Cervical Fusion (PCF), Anterior Lumbar Interbody Fusion (ALIF), Posterior Fixation (PF), Lateral Interbody Fusion (LIF), Posterior Lumbar Interbody Fusion (PLIF) and Transforminal Lumbar Interbody Fusion (TLIF).
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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