Medtronic and Medicrea announced in a press release that they are in the process of finalizing the acquisition by the US company of the Lyon-based SME. The latter is one of the pioneers in transforming spinal surgery through artificial intelligence, predictive modeling and customized spinal implants. The agreement between the two players will be achieved through the acquisition by Medtronic of all outstanding Medicrea shares.
Medicrea, a pioneering SME in its field
With a focus on predictive medicine, Medicrea designs, manufactures and distributes more than 30 families of FDA-approved implantable devices, which have been used in more than 175,000 surgical procedures worldwide to date. Medicrea is a Lyon-based SME with 175 employees, 35 of whom work in its subsidiary Medicrea USA Corp. based in New York.
The company has its own ultra-modern production unit in Lyon, dedicated to the machining and development of custom implants by 3D printing from titanium powder. By combining the analytical power of computer tools and big data and deep learning technologies with the wealth of clinical data the Company collects, as well as the scientific data available, Medicrea is well positioned to enhance the effectiveness of spine treatments by reducing surgical complications and limiting the time spent in the operating room.
An acquisition to strengthen Medtronic
This acquisition would strengthen Medtronic’s position as a global innovator in enabling technologies and solutions for spinal surgery.
“Combining Medtronic’s innovative portfolio of spinal implants, robotics, navigation and 3D imaging technology with Medicrea’s capabilities and solutions in data analysis, Artificial Intelligence and customized implants would enhance Medtronic’s fully integrated procedural solution for the planning and execution of surgical procedures. This marks another important milestone in our commitment to improving outcomes in the treatment of spinal conditions,” said Jacob Paul, Senior Vice President and President of the Cranial and Spinal Technologies Division, part of Medtronic’s Restorative Therapies Group.
“Medtronic will become the first company to offer an integrated solution that includes Artificial Intelligence-based surgical planning, custom spinal implants and robot-assisted surgery, which will greatly benefit our customers and their patients.
Medicrea’s product portfolio includes the UNiD ASI™ (Adaptive Spine Intelligence) technology, designed to assist surgeons in the pre-operative planning of their cases and create tailor-made implants for each surgical procedure. Medicrea’s solution is based on predictive modeling and sophisticated algorithms that accurately measure and digitally reconstruct the spine to obtain its optimal profile.
“Spinal column surgery is one of the most complex procedures in healthcare due to the large number of different parameters to be considered. It is impossible for the human brain to calculate them all for a single patient,” comments Denys Sournac, Founder, President and CEO of Medicrea.
“The medical world has been waiting for the arrival of personalization in spinal surgery. Thanks to scientific advances in the understanding of sagittal balance and spinal injuries, combined with the advent of new digital technologies, it is now possible to offer fully personalised implants to spinal patients. We are delighted to join forces with Medtronic because we share a similar mission – to restore patients’ quality of life over the long term. Now, together, we can help more patients in more places receive quality surgical care.
Key conditions of the operation
The Offer price of 7.00 euros per share represents a premium of :
- 22% compared to the closing price of Medicrea shares on July 14, 2020
- 33% relative to the volume-weighted average Medicrea share price in the month prior to July 14, 2020
- 56% relative to the volume-weighted average Medicrea share price during the three months prior to 14 July 2020
- The Offer will be made for all shares issued by Medicrea as well as any shares that may be issued upon the exercise of warrants, subject to their exercise prior to the closing of the Offer.
The principal shareholders of Medicrea, including its Founder, President and Chief Executive Officer Denys Sournac, as well as certain other employees, officers and directors of Medicrea, have agreed to tender their Medicrea shares to the Offer (including shares to be received upon the exercise of share warrants (“Warrants”), but excluding, for Denys Sournac and employees, their free shares under a lock-up period).
These commitments to contribute remain revocable in the event of a superior competing offer, in accordance with stock exchange regulations.
Through the above-mentioned contribution commitments, Medtronic has entered into agreements with Medicrea shareholders for a total of approximately 44.4% of Medicrea’s share capital (adjusted for the exercise of the warrants).
Completion of the transaction remains subject to customary conditions precedent, including obtaining the visa of the Autorité des Marchés Financiers (the “AMF”), the authorizations applicable under the French foreign investment control and merger control laws in the United States.
The completion of the Offer will be subject, in addition to the lapsing threshold provided for in article 231-9, I 1° of the AMF’s general regulations, to a waiver threshold defined by the acquisition by Medtronic of a number of Medicrea shares representing at least 66.67% of the share capital and voting rights.
Medicrea’s board of directors will render its reasoned opinion on the merits of the Offer for Medricrea, its shareholders and its employees in due course, following receipt of the report of the independent expert to be appointed in accordance with article 261-1, I & III of the AMF’s general regulations by the ad hoc committee to be formed by Medicrea’s board of directors.
It is envisaged that the Offer will be filed with the AMF in September 2020. The opening of the Offer will take place after obtaining the authorization under the French Foreign Investment Control Act, and the Offer will then remain subject to the authorization under the US Merger Control Act.
Subject to obtaining the various regulatory approvals and the satisfaction of the other usual conditions precedent, the transaction is expected to be completed before the end of 2020. The transaction is not expected to have a material impact on Medtronic’s adjusted earnings per share for the first two fiscal years before having an accretive impact in fiscal 2023. In addition, the transaction is expected to meet Medtronic’s long-term financial criteria for acquisitions.