A Medical Device Daily

Orthopedics company Zimmer Holdings (Warsaw, Indiana) last week said it had reached an agreement to make an offer to acquire ORTHOsoft (Montreal) for C$50 million.

Zimmer said it would offer to pay C$1.10 a share for all of ORTHOsoft’s outstanding common shares. The total offer price of C$50 million excludes the 12.4% of outstanding ORTHOsoft stock held by a Zimmer subsidiary, the company said.

According to Zimmer, the transaction will be funded out of operating cash flow and is expected to be completed in 4Q07.

Zimmer said it estimates the transaction to be about 1 cent dilutive to adjusted EPS in 4Q07, 3 cents dilutive in 2008 and accretive thereafter.

“We look forward to welcoming ORTHOsoft’s leadership team and skilled employees to the Zimmer family,” said David Dvorak, president/CEO of Zimmer president. “Their commitment to innovation and customer support in computer-aided surgical navigation has won the high regard of surgeons in North America and Europe. This acquisition will support our SmartTools strategic initiative and will allow us to vertically integrate our Zimmer Computer Assisted Solutions (CAS) efforts, enabling us to direct future development and to apply CAS concepts across our various businesses.”

The agreement includes a C$1.75 million break-up fee that ORTHOsoft would have to pay to Zimmer in certain circumstances.

ORTHOsoft says it develops best-in-class medical software, instruments and computerized systems designed to help orthopedic surgeons increase accuracy in hip, knee and spine implants.

ORTHOsoft said its FDA-approved software solutions are developed by surgeons for surgeons, resulting in intuitive navigation that tracks surgical flow and provides surgeons with real-time data, helping to improve the surgical process and patient outcomes.

Dr. Louis-Philippe Amiot, founder, CEO and chairman of ORTHOsoft, said, “This transaction allows us to deliver significant value for our shareholders while assuring that we will have an opportunity, through the global power of the Zimmer distribution network, to present our technology and expertise to many new customers and markets. This acquisition will allow us to concentrate on specific applications for Zimmer products and provide outstanding universal orthopedic navigation solutions.”

ORTHOsoft’s Navitrack Navigation System is a suite of what it calls “universal” software tools for knee and total hip replacement — running on a new platform called the Sesamoid — and features industry-exclusive high-performance optical reflectors, the NavitrackER. The Navitrack FluoroSpine System assists surgeons in precisely positioning pedicle screws for conventional and minimally invasive procedures in order to help reduce complication rates resulting from implant misplacement, the company said. This in turn can potentially help avoid long-term neurological deficits, reduce incidents of implant loosening and avoid reoperations.

Zimmer said it intends to maintain ORTHOsoft’s current operations in Montreal and will integrate the company with its existing CAS organization.

ORTHOsoft has 81 employees, most engaged in sales and product development.

The board of ORTHOsoft has unanimously recommended that ORTHOsoft shareholders accept the offer.

Coady Diemar Partners, as financial advisor to ORTHOsoft’s board, has issued an opinion to the ORTHOsoft board that the C$1.10-a-share offer is fair to ORTHOsoft shareholders, representing a premium of about 69% over the closing price of the shares on the TSX Venture Exchange on Thursday, the last trading day prior to the announcement of the offer and a premium of roughly 66% based on the 20-day average closing price of the shares as of Thursday.

In other dealmaking activity:

• Symbion (Nashville) reported the completion of its merger with an affiliate of Crestview Partners.

At a special meeting on Aug. 15, the stockholders of Symbion voted to approve the merger agreement that the company entered into on April 24. Symbion stockholders are entitled to receive $22.35 in cash, without interest, for each share of Symbion common stock held. Symbion common stock is no longer traded on the NASDAQ Stock Market.

Symbion owns and operates a network of 57 short stay surgical facilities in 23 states. Its facilities provide non-emergency surgical procedures across many specialties.

Crestview Partners is a $1.5 billion private equity firm established in 2004 by former Goldman, Sachs partners Thomas Murphy, Jr. and Barry Volpert.

• Haemonetics (Braintree, Massachusetts) reported the formation of Haemonetics Software Solutions to provide information technology solutions to the blood and plasma collection industries.

Haemonetics Software Solutions is the result of a merger between two Haemonetics subsidiaries: 5D Information Management (Edmonton, Alberta) and Information Data Management (IDM; Rosemont, Illinois). 5D provides information technology to the plasma industry while IDM develops blood bank applications. According to the company, the merger will allow Haemonetics to better service customers and to leverage the strengths of both companies as it develops future generations of software solutions. The new name, Haemonetics Software Solutions, puts the strong Haemonetics’ brand behind the information technology systems, the company said.

Haemonetics Software Solutions will operate out of the existing 5D and IDM locations in Edmonton, Alberta and Rosemont, Illinois. Haemonetics also said that as a result of the merger, Tom Britton, formerly president of 5D, has been appointed president of Haemonetics Software Solutions, and Tim Coburn, formerly president of IDM, has been appointed VP of business development for Haemonetics’ Global Services business.

Haemonetics makes automated blood processing systems and information technology to support blood collection and processing.