FREE MEMBERSHIP Includes » ABL Advisor eNews + iData Blasts | JOIN NOW ABLAdvisor Gray ABLAdvisor Blue
Skip Navigation LinksHome / News / Read News


TD Bank, Regions to Provide $80MM Facility to Support RTI Biologics Acquisition

June 12, 2013, 07:37 AM
Filed Under: Life Sciences

RTI Biologics Inc. (RTI), a leading provider of orthopedic and other biologic implants, announced its intent to acquire privately held Pioneer Surgical Technology (Pioneer), headquartered in Marquette, MI. Pioneer is a leading medical technology company that manufactures and distributes metal and synthetic products in the orthopedics, biologics, spine, trauma and cardiothoracic markets. The acquisition of Pioneer supports RTI's strategic initiatives to expand its current implant portfolio into metals and synthetics and to grow direct distribution.

Under the terms of the merger agreement, RTI will pay $130 million in cash to acquire all the outstanding stock of Pioneer. The transaction will be funded through a combination of cash on hand, a new credit facility and a concurrent private placement of convertible preferred equity from Water Street Healthcare Partners.

RTI has received a commitment from TD Bank, N.A., TD Securities and Regions Bank for a five-year, $80 million senior secured facility, which includes a $60 million term loan and a $20 million revolving credit facility.

Additionally, RTI has agreed to a $50 million private placement of convertible preferred equity with Water Street, a leading healthcare-focused private equity firm with extensive operating experience and industry knowledge. Water Street has a strong track record of leading transformational acquisitions that have created market-leading healthcare companies of greater long-term value.

“The combination of RTI and Pioneer is an exciting opportunity for both companies and their employees," said Brian K. Hutchison, RTI president and chief executive officer. "This acquisition is strongly aligned with RTI's long term strategic plan, accelerating new growth opportunities and gross margin expansion. Pioneer has built a strong distribution network for their implants, which will be beneficial when we launch our map3™ cellular allogeneic bone graft later this year. This acquisition will bring immediate scale, allowing us to reach our strategic goals and take advantage of growth opportunities more quickly than either company could do independently."

“We believe the combination of Pioneer and RTI will be a catalyst for continued growth,” said Daniel Webber, Pioneer’s president and chief executive officer. “The combined company will have a broad portfolio of complementary surgical implants benefiting patients, surgeons and hospitals, as well as advancing the positive momentum we have built at Pioneer. Additionally, RTI’s culture of innovation is a great fit with that of our own employees.”

“We are pleased to work with RTI to complete this acquisition and accelerate the company’s strategic plan for growth,” said Curt Selquist, an operating partner with Water Street who has more than 35 years of healthcare experience. “We look forward to contributing our team’s years of experience in the medical products sector and our network of industry relationships to support RTI with continuing to build on its strong foundation.”

The convertible preferred stock will be convertible into shares of RTI common stock, subject to the satisfaction of certain conditions. The convertible preferred stock will also accrue dividends at a rate of 6 percent per year, subject to adjustment under specified conditions.

RTI Biologics Inc. is a leading provider of sterile biologic implants for surgeries around the world with a commitment to advancing science, safety and innovation. RTI prepares human donated tissue and animal tissue for transplantation through extensive testing and screening, precision shaping and using proprietary, validated processes. These allograft and xenograft implants are used in orthopedic, dental and other specialty surgeries.

Pioneer Surgical Technology Inc. was founded in Marquette, Mich. in 1992. Since that time, Pioneer Surgical has developed successful products in the spine, biologics, orthopedics, and cardiothoracic markets. Pioneer has several facilities throughout the U.S. and in Houten, The Netherlands.

Week's News

Comments From Our Members

You must be an ABL Advisor member to post comments. Login or Join Now.