MiMedx To Buy Stability Biologics

(RTTNews) - MiMedx Group Inc. (MDXG) announced that it has signed a definitive agreement to acquire Stability Inc., d/b/a Stability Biologics, a provider of human tissue products to surgeons, facilities and distributors serving the surgical, spine and orthopedics sectors of the healthcare industry.

The company also announced today its revised outlook for 2016, which includes the expected impact of the acquisition on forecasted 2016 results.

The definitive agreement provides that the purchase consideration for Stability Biologics will be a combination of cash and stock. MiMedx expects to pay $10 million at the closing, comprised of 60% cash and 40% stock, plus assumed debt, with future contingent consideration to be paid through a two-year earn out arrangement. The earn out will be based on the 2016 and 2017 performance of the Stability Biologics business, and may be the larger portion of the overall consideration for the transaction. The earn out will also be paid in the form of 60% cash and 40% stock.

Stability Biologics is privately held and was founded in 2010. The company is headquartered in Nashville, Tennessee and its state-of-the-art tissue processing center is located in San Antonio, Texas. During its five year history, Stability Biologics has evolved from its initial focus as a distributor of allografts, to its current position as an integrated provider in the surgical, spine and orthopedics sector of healthcare specializing in human tissue and bone product design and development, tissue processing and sales and distribution.

MiMedx expects the transaction to be accretive to Full Year Adjusted EPS in 2016, and it projects the 2016 Stability Biologics revenues generated from its processed tissue and bone product sales and distribution to be at least $15 million. The transaction is subject to customary conditions of closing, which is expected to occur by mid-January 2016. Following the transaction, Stability Biologics will operate as a wholly-owned subsidiary of MiMedx.

The Company reported record revenue for the year ended December 31, 2015 of $187.3 million, a $69.1 million or 58% increase over 2014 revenue of $118.2 million. The Company posted record revenue for the 2015 fourth quarter of $51.8 million, a $12.3 million or 31% increase over 2014 fourth quarter revenue of $39.6 million.

For the first quarter of 2016, the company expects revenue to be in the range of $55.5 million to $58 million.

The company's full year 2016 expectations includes the Stability Biologics acquisition.

Full year 2016 revenue is expected to be in the range of $260 million to $270 million. Adjusted EPS for 2016 is forecasted to be in the range of $0.33 to $0.37.