Transaction Creates Medical Device
Company with Comprehensive Portfolio of Wound
Care Solutions to Improve Healthcare Outcomes
Misonix, Inc. (Nasdaq: MSON) (“Misonix”) a provider of
minimally invasive therapeutic ultrasonic medical devices that
enhance clinical outcomes, announced today that it has entered into
a definitive agreement with Solsys Medical, LLC (“Solsys”), a
privately held regenerative medical company, to acquire Solsys in
an all-stock transaction valued at approximately $97 million. Under
the terms of the agreement, Misonix will issue approximately 5.7
million new shares to Solsys unitholders. After the completion of
the transaction, it is expected that Misonix shareholders
immediately prior to the closing will own 64% of the combined
entity, and Solsys unitholders will own 36%. Misonix will also
assume Solsys’ outstanding secured debt of approximately $20
million upon closing.
Solsys markets an advanced wound care product
under the brand name TheraSkin, a cellular and tissue-based product
for regenerative wound healing designed to help healthcare
professionals treat difficult-to-heal chronic wounds. TheraSkin is
a clinically proven, minimally manipulated, living human
split-thickness skin allograft that is cryopreserved to retain
living cells and growth factors while maintaining a mature native
human dermal architecture. The versatility in applications and
sizes of TheraSkin reduces product waste and helps drive
operational efficiencies to better manage total cost of care and
quality outcomes needed to treat difficult to heal and chronic
wounds. TheraSkin has been applied to over 100,000 wounds supported
by multiple clinical studies.
The planned acquisition of Solsys substantially
broadens Misonix’s addressable market through wound care solutions
that are complementary to its existing products. In calendar
2019, Solsys is expected to achieve sales of approximately $32
million. In fiscal 2020, the pro forma company is expected to
generate over $80 million in sales. The combined company
anticipates top line revenue growth in excess of 20% per annum over
the next several years.
Stavros Vizirgianakis, President and Chief
Executive Officer of Misonix, commented, “We have known the team at
Solsys for over two years and have been impressed in their ability
to grow their revenue meaningfully during that time. The
acquisition of Solsys Medical is a transformative event for Misonix
and represents a strategically and financially compelling growth
opportunity for the Company and for our shareholders. Solsys and
its leading wound treatment application, TheraSkin, is highly
complementary to Misonix’s existing wound debridement solution,
SonicOne. As a result, the combined entity will be ideally
positioned to establish a new standard of care in the growing
chronic wound care market through what we view as the best-in-class
wound treatment solution. The Misonix-Solsys differentiated wound
care treatment is supported by extensive clinical data that
demonstrates the positive impact to critical aspects of wound
healing process that lead to improved patient outcomes, as well as
clinical efficacy and a strong economic value proposition for
hospitals.
“The proposed transaction significantly enhances
the competitive position of the combined entity through increased
scale and broader commercial reach. By acquiring an established
participant in the tissue space with a direct sales team of over 80
professionals, Misonix significantly advances its go-to-market
strategy by creating two dedicated sales teams for our wound and
surgical businesses. This approach will enable us to further
elevate sales productivity while substantially broadening the
market penetration of the combined company’s wound and surgical
products across operating rooms and hospital outpatient
facilities.
“Over the past year, Misonix has succeeded with
several key strategic initiatives including creating a performance
based culture, driving consumable or recurring revenue and
addressing new markets. These efforts led to significant growth in
revenue in fiscal 2018 and during the first half of fiscal 2019.
Going forward, we will continue to focus on driving additional
operational efficiencies, further improving our sales and
go-to-market strategies, penetrating new geographic markets,
repositioning and expanding of our product portfolio, including the
market introduction of our recently announced NEXUS platform. Our
combination with Solsys will further advance our efforts across
these initiatives by combining our expertise and customer
relationships with demonstrated clinical benefits and improving
patient outcomes.
“We are pleased to welcome all of the current
Solsys unitholders, including leading healthcare investment firms
1315 Capital and SV Health Investors, and are delighted that they
recognize the strong opportunity to participate in the significant
upside potential of the combined company.”
Allan Staley, Co-founder and Chief Executive
Officer of Solsys, added, “We are excited to reach this agreement
with Misonix, which further advances our mission to heal difficult
to heal wounds and restore health to patients around the world. Our
conviction in the value of the combined companies is unequivocal,
as reflected in our desire to become shareholders of Misonix and
participate in what we see as tremendous potential for growth and
shareholder value creation. This combination will allow Misonix to
leverage its wound debridement technology to reach more patients,
in more ways and in more places by offering healthcare providers a
truly compelling wound care solution. The entire team at Solsys
looks forward to working together with our new family at Misonix to
improve healthcare outcomes and the lives of patients
everywhere.”
Joe Dwyer, Chief Financial Officer of Misonix,
commented, “The acquisition of Solsys marks further progress in
advancing Misonix’s goals for continued growth and enhancing
shareholder value with TheraSkin sales that are growing at an
annual rate in excess of 25%. The acquisition also enhances
Misonix’s ability to address the domestic wound biologics market,
which is valued at approximately $700 million annually, and is
projected to grow at a compound annual growth rate of 8%. We
believe this transaction creates significant mid and long-term
growth opportunities for the combined company to grow revenue in
excess of 20% per annum over the next several years.
“Going forward, we expect to have sufficient
cash and debt capacity to fund our combined operations to
profitability. With our experienced management team, operating
discipline and focused approach to managing our capital structure
and cost of capital, Misonix remains committed to achieving
sustainable long-term revenue growth. We look forward to working
with the Solsys team to ensure an efficient integration and to
deliver on the value of this compelling combination for our
patients, our shareholders and our employees.”
The transaction has been approved by the boards
of directors of both companies. The completion of the acquisition
and the issuance of Misonix shares in connection with the proposed
transaction is subject to the approval by Misonix shareholders and
the completion of the transaction is subject to approval by 55% of
Solsys’ Series E unitholders and a majority of its Common
unitholders, Series A unitholders, Series B unitholders, Series C
unitholders and Series D unitholders, voting as a single class, as
well as the satisfaction of certain customary closing conditions.
The transaction is expected to be completed in the third quarter of
calendar year 2019.
In addition, the combined company’s Board of
Directors will consist of five members: three current Misonix
directors, including Stavros Vizirgianakis, and two directors
nominated by Solsys at closing. The combined company will remain
headquartered in Farmingdale, NY with Solsys’ operations and
offices in Newport News, VA. J.P. Morgan Securities LLC is acting
as financial advisor to Misonix, Jones Day is acting as its legal
counsel, and BRG Valuation Services, an affiliate of Berkeley
Research Group, provided a fairness opinion to the Board of
Directors of Misonix in connection with the proposed transaction.
Canaccord Genuity LLC is acting as financial advisor to Solsys and
Greenberg Traurig, LLP is acting as its legal counsel.
Conference CallMisonix will
host a conference call and webcast tomorrow, Friday, May 3, 2019,
at 8:30 a.m. ET to discuss its acquisition of Solsys and host a
question and answer session. A presentation will be posted on the
Misonix website at www.misonix.com. The dial in number for the
audio conference call is 877-407-4018 (domestic) or 201-689-8471
(international), conference ID 13690503. Participants may also
listen to a live webcast of the call at the Company’s website. The
webcast link and a presentation which management will review on the
conference call is available through the “Events and Presentations”
section under “Investor Relations” at www.misonix.com. A replay of
the conference call will be available for 14 days following its
completion. A webcast replay will also be available for 30 days on
the Company’s website, www.misonix.com.
About Misonix,
Inc. Misonix, Inc. (NASDAQ: MSON) designs,
manufactures and markets ultrasonic medical devices for the precise
removal of hard and soft tissue, including bone removal, wound
debridement and ultrasonic aspiration. Misonix is focused on
leveraging its proprietary ultrasonic technology to become the
standard of care in operating rooms and clinics around the world.
Misonix's proprietary ultrasonic medical devices are used in a
growing number of medical procedures, including spine surgery,
neurosurgery, orthopedic surgery, cosmetic surgery, laparoscopic
surgery, and other surgical and medical applications. At Misonix,
Better Matters to us. That is why throughout the Company’s history,
Misonix has maintained its commitment to medical technology
innovation and the development of ultrasonic surgical products that
radically improve patient outcomes. Additional information is
available on the Company's web site at www.misonix.com.
About Solsys Medical,
LLC Solsys Medical, LLC (formerly known and doing
business as Soluble Systems, LLC) markets and sells TheraSkin, a
regenerative medical product, designed by nature and made for
healing, to help healthcare professionals treat difficult to heal
chronic wounds.
Forward Looking
Statements This communication contains
forward-looking statements, which address a variety of subjects
including, for example, the expected timetable for closing of the
transaction between Misonix and Solsys, the allocation of the
merger consideration and the anticipated growth rate of the
combined company. Statements that are not historical facts,
including statements about our beliefs, plans and expectations, are
forward-looking statements. Such statements are based on our
current expectations and are subject to a number of factors and
uncertainties, which could cause actual results to differ
materially from those described in the forward-looking statements.
The following important factors and uncertainties, among others,
could cause actual results to differ materially from those
described in these forward-looking statements: the ability to
satisfy the conditions to closing of the proposed transaction, on
the expected timing or at all; the occurrence of any event that
could give rise to the termination of the merger agreement; the
risk of stockholder litigation relating to the proposed
transaction, including resulting expense or delay; higher than
expected or unexpected costs associated with or relating to the
transaction; the risk that expected benefits, synergies and growth
prospects of the transaction may not be achieved in a timely
manner, or at all; the risk that Solsys business may not be
successfully integrated with Misonix following the closing; the
risk that Misonix and Solsys will be unable to retain and hire key
personnel; and the risk that disruption from the transaction may
adversely affect Misonix’s or Solsys’ business and relationships
with their customers, suppliers or employees. For additional
information about factors that could cause actual results to differ
materially from those described in the forward-looking statements,
please refer to Misonix’s filings with the Securities and Exchange
Commission (“SEC”), including the risk factors contained in
Misonix’s most recent Quarterly Reports on Form 10-Q and Annual
Report on Form 10-K. Forward-looking statements represent
management’s current expectations and are inherently uncertain.
Except as required by law, we do not undertake any obligation to
update forward-looking statements made by us to reflect subsequent
events or circumstances.
Important Additional Information Will Be
Filed With The SEC In connection with the proposed
transaction, the Misonix and Solsys intend to file relevant
information with the SEC, including a registration statement of
Misonix on Form S-4 that will include a prospectus and proxy
statement of Misonix and an information statement of Solsys (the
“joint proxy statement/information statement and prospectus”).
INVESTORS AND SECURITY HOLDERS OF MISONIX AND SOLSYS ARE URGED TO
CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND JOINT PROXY
STATEMENT/INFORM694-ATION STATEMENT AND PROSPECTUS AND OTHER
RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT MISONIX,
SOLSYS AND THE PROPOSED TRANSACTION. A definitive joint proxy
statement/information statement and prospectus will be sent to
Misonix’s stockholders and Solsys unitholders. Investors and
security holders will be able to obtain the registration statement
and the joint proxy statement/information statement and prospectus
free of charge from the SEC’s website or from Misonix as described
below. The documents filed by Misonix with the SEC may be obtained
free of charge at Misonix’s website at www.misonix.com or at
the SEC’s website at www.sec.gov. These documents may also be
obtained free of charge from Misonix by requesting them by mail at
Misonix, Inc., 1938 New Highway, Farmingdale, New York 11735,
Attention Investor Relations, or by telephone at 631-694-9555.
Participants in the
Solicitation Misonix, Solsys and certain of their
directors, executive officers and employees may be deemed
participants in the solicitation of proxies from Misonix
stockholders in connection with the proposed transaction.
Information regarding the persons who may be deemed to be
participants in the solicitation of Misonix stockholders in
connection with the proposed transaction, including a description
of their direct or indirect interests, by security holdings or
otherwise, will be set forth in the joint proxy
statement/information statement and prospectus when it is filed
with the SEC. Information about the directors and executive
officers of Misonix and their ownership of Misonix common stock is
set forth in the definitive proxy statement for Misonix’ s 2019
annual meeting of shareholders, as previously filed with the SEC on
March 25, 2019. Free copies of these documents may be obtained as
described in the paragraphs above.
Non-SolicitationThis
communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of the Securities Act of 1933, as amended.
Contact: Joe DwyerChief
Financial OfficerMisonix, Inc.631-694-9555
Joseph Jaffoni, Norberto Aja, Jennifer NeumanJCIR 212-835-8500
or mson@jcir.com
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