Encore to Acquire Additional Reconstructive, Spinal Implant Products

Encore Medical has entered into a definitive agreement to acquire substantially all of the assets of Osteoimplant Technology (OTI), which will include a complete line of spinal implant products.

Under the terms of the agreement, Encore will acquire the OTI assets for total cash consideration of $14.5 million. There are also up to $1.5 million in future milestone payments that could be earned by OTI based on the performance of the products being acquired during the first 12 months after the closing of the transaction.

OTI owns and markets the spinal products from Advanced Spine, including the VariGrip and VariFix spinal fixation systems, and has developed and sells the MJS Anatomic Knee System. Encore expects to be able to generate between $9 million and $10 million in sales during the first year after the closing of the transaction from the products being acquired. The merger is subject to the satisfaction of a number of standard closing conditions and to the approval of the OTI shareholders.