Medtronic Inc. (NYSE: MDT) said Tuesday it will purchase Osteotech Inc. (NASDAQ: OSTE) for $123 million.
The world’s largest medical device maker, based in Fridley, Minnesota, said it would pay $6.50 for each Osteotech share, a 65 percent premium over Osteotech’s Monday closing price of $3.94.
Osteotech, which makes orthopedic-focused biologic products that spur regenerative healing, has been under attack by a group of dissident investors unhappy with the company’s financial performance, of late.
With the Rise of AI, What IP Disputes in Healthcare Are Likely to Emerge?
Munck Wilson Mandala Partner Greg Howison shared his perspective on some of the legal ramifications around AI, IP, connected devices and the data they generate, in response to emailed questions.
Earlier this month, Heartland Advisors, Spencer Capital Partners, and Boston Avenue Capital, which collectively control nearly 23 percent (four millions shares) of the company, urged shareholders to replace four of Osteotech’s six board members with their’ candidates.
“The board’s poor oversight of management has contributed to the loss of key customers, revenue stagnation, delayed product introductions and missed opportunities,” the investors wrote in a letter to shareholders.
Last year, Osteotech lost $4 million on revenue of $97 million compared to a profit of $2.2 million on revenue of $103.8 million in 2008. Since September 2009, Osteotech shares have fallen about 20 percent.
Osteotech’s board argues the company has improved of late, noting Osteotech swung back to a small profit in the second quarter. Osteotech also disclosed that it hired Deutsche Bank Securities last year to explore selling the company.
A Personalized Approach to Medication Nonadherence
At the Abarca Forward conference earlier this year, George Van Antwerp, managing director at Deloitte, discussed how social determinants of health and a personalized member experience can improve medication adherence and health outcomes.
“The board believes that the Company has made tangible progress in its growth strategy focused on new, innovative biologics, but the value the management team has created is not adequately reflected in the current stock price,” Chair Kenneth P. Fallon said in a recent statement. “While the management team has been executing their growth strategy, the board has undertaken a review of the company’s strategic options and alternatives, specifically focusing on maximizing shareholder value.”
It’s not yet clear how the dissident investors will react to the Medtronic deal, or whether they feel the $123 million offer is adequate.
Medtronic says it’s buying a company with strong products like Grafton demineralized bone mix. Osteotech also is awaiting approval from the Food and Drug Administration for its engineered human collagen biomaterial technology.
These technologies will help Medtronic strengthen its position in the spine, orthopedic trauma and dental markets, and expand into new growth areas like joint reconstruction, foot and ankle, and sports medicine.
“This acquisition represents a key step in Medtronic’s strategy to build a broader business in regenerative biologics,” Chris O’Connell, Medtronic executive vice president and Restorative Therapies Group president, said in a statement. “Osteotech’s products and capabilities will better position Medtronic in today’s competitive musculoskeletal biologics market, and also position the company more broadly for the opportunity we see in the future.”
