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TranS1 Inc. Announces Agreement To Acquire Baxano, Inc. And $17.2M Financing Commitment

Conference Call to be Held on March 4, 2013 at 8:30 a.m. EST

Combination Adds Rapidly Growing Minimally Invasive Spinal Decompression Technology and Large Surgeon User Base

Baxano Shareholders Commit $15.3M in Concurrent Financing

RALEIGH, N.C., March 4, 2013 (GLOBE NEWSWIRE) -- TranS1 Inc. (Nasdaq:TSON), a medical device company focused on designing, developing and marketing products to treat degenerative conditions of the spine affecting the lumbar region, today announced that it has entered into a definitive agreement to acquire Baxano, Inc., a privately-held medical device company that manufactures and markets the iO-Flex® system utilized in standard spinal decompression surgery and is developing the iO-Tome TM system, a precision facetectomy instrument.

Merger Transaction

Under the terms of the merger agreement (the "Merger Agreement"), TranS1 Inc. ("TranS1" or "the Company") will issue approximately 10.4 million shares of TranS1 Common Stock and pay $550,000 of cash (approximately $23.6 million of value based on the March 1, 2013 closing price) to acquire Baxano, Inc. ("Baxano") (the "Merger Transaction"). The Company will also refinance $3.0 million of existing debt of Baxano in the transaction at closing. On a pro forma basis, prior to the financing transaction discussed below, current TranS1 shareholders will own approximately 72.4% of the combined company and approximately 27.6% will be owned by current Baxano shareholders. The final number of shares will be subject to certain adjustments at closing. The Merger Transaction is currently expected to close early in the second quarter of 2013 and is subject to TranS1 shareholder approval and customary conditions to closing as detailed in the Merger Agreement.

The Company believes that the strategic merit of the combined business includes the following benefits to its shareholders:
  • Expands focus on minimally invasive lumbar spine treatments, with a combined addressable market opportunity of $3.9B
  • Complements existing proprietary product portfolio with differentiated patented products
  • Broadens sales force coverage and provides significant cross-selling opportunities within the MIS surgeon customer focus
  • Improves financial profile

"We believe that Baxano is a complementary strategic fit for our product portfolio," said Ken Reali, President and Chief Executive Officer of TranS1. "Minimally invasive treatments are the fastest growing segment of the spine market. The combination of our AxiaLIF® and VEO TM lumbar fusion products with Baxano's iO-Flex and iO-Tome systems for lumbar direct decompression and facetectomy, respectively, will allow us to better meet the needs of our spine surgeon customers. This merger will create a unique company with the vision of being a leader in providing less invasive and minimally invasive solutions for spine disorders."

"We are enthusiastic about the combination of Baxano with TranS1," said Tony Recupero, President and Chief Executive Officer of Baxano. "We believe the combined company will have a compelling set of minimally invasive products to benefit patients, surgeons, hospitals and payors and will continue to build on the positive sales momentum we have built at Baxano over the past few years."

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