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Wright Medical Group, Inc. And BioMimetic Therapeutics, Inc. Enter Into Agreement To Combine Businesses

Wright Medical Group, Inc. (NASDAQ: WMGI) and BioMimetic Therapeutics, Inc. (NASDAQ: BMTI) announced today that they have entered into a definitive agreement for a business combination of Wright and BioMimetic, both publicly traded, Tennessee-based companies. Wright is an orthopedics company with a market-leading lower extremities franchise. BioMimetic is focused on developing regenerative medicine products to promote the healing of musculoskeletal injuries and diseases with a novel protein therapeutic product, Augment ® Bone Graft, under late stage FDA review as a replacement for autologous bone graft in foot and ankle fusions. The transaction will combine BioMimetic’s breakthrough biologics platform and pipeline with Wright’s established sales force and product portfolio, to further accelerate growth opportunities in Wright’s Extremities business.

Under the terms of the agreement, the transaction has a total potential value for BioMimetic shareholders of approximately $380 million, or $12.97 per share, based on Wright’s closing stock price on Friday, November 16, 2012. Each share of BioMimetic common stock will be converted into the right to receive an upfront payment of $1.50 in cash and 0.2482 shares of Wright common stock. The upfront payment values BioMimetic at approximately $190 million, or $6.47 per share, based on Wright’s closing stock price on November 16, 2012. Each BioMimetic share will also receive one tradable Contingent Value Right (CVR), which entitles its holder to receive additional cash payments of up to $6.50 per share, which are payable upon receipt of FDA approval of Augment ® Bone Graft and upon achieving certain revenue milestones.

Any contingent milestone payments will be paid in cash. The CVR payments to BioMimetic shareholders are structured as follows:
  • $3.50 per share upon FDA approval of Augment ® Bone Graft;
  • $1.50 per share upon the achievement of $40 million in trailing twelve month sales for all products contributed by BioMimetic;
  • $1.50 per share upon the achievement of $70 million in trailing twelve month sales for all products contributed by BioMimetic.

The latter two sales milestone payments cannot be made sooner than 24 and 36 months post-closing of the transaction, respectively.

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