Under the terms of the merger agreement, Tutogen shareholders will receive 1.22 shares of newly issued RTI common stock in exchange for each share of Tutogen common stock they own.
Based on Regeneration Technologies (RTI’s) closing stock price of $10.54 per share on November 12, 2007, this represents a value of $12.86 per Tutogen share, or an aggregate equity value of approximately $263 million. Upon completion of the merger, RTI stockholders will own approximately 55% of the combined company and Tutogen stockholders will own 45% of the company, on a diluted basis.
As a result of the transaction, the combined company expects to have a total of 56 million shares outstanding upon the closing, composed of 31 million currently outstanding shares of RTI common stock and 25 million shares of RTI common stock to be issued to Tutogen shareholders.
The combined company will be headquartered in Alachua, Florida under the leadership of Brian Hutchison as chairman and CEO. Tom Rose, currently vice president, CFO and secretary of RTI, will serve in the same capacity of the combined entity. Guy Mayer, currently president and CEO for Tutogen, will become president of the combined company, with a focus on international activities and sales and marketing.
The combined company is expected to have in excess of $30 million in cash at December 31, 2007 and be generating positive operating cash flow. The transaction will combine RTI’s role in biologics for orthopedics with Tutogen’s sterile biologic implants for dental, hernia and other specialty surgeries. The transaction is expected to close in the first quarter of 2008.
Guy Mayer, president and CEO of Tutogen, said: “We believe that our strength in the tissue membrane markets and our expertise in xenograft applications will blend perfectly with RTI’s strength in innovation and leadership in the orthopedics markets. Each company’s complementary strengths will create a very well-balanced leader in the biologics industry.”