Bioventus amends CartiHeal acquisition structure

Chicago, June 21 – Bioventus LLC announced amendments regarding its pending acquisition of CartiHeal Ltd. in a press release.

The cash due at closing is being reduced to $50 million from $315 million. The company paid an initial $50 million, which was deposited earlier into an escrow account.

The remaining $215 million purchase price will be paid to CartiHeal stockholders in five tranches starting in 2023 and ending no later than 2027.

The payments will be made either on certain installment payment dates or upon the achievement of certain milestones.

Interest on each tranche of the deferred amount will be 8% annually, until the tranche is paid.

Additionally, the approximately $135 million payable to CartiHeal’s stockholders upon the achievement of $100 million in trailing 12-month sales will now be payable upon the achievement of $75 million in trailing 12-month sales.

The acquisition is expected to close by the end of July.

The total upfront payment will be $108 million, inclusive of the earlier deposited $50 million. The total includes approximately $8 million of CartiHeal’s transaction-related fees and expenses that Bioventus has agreed to pay.

The payment will be financed with the closing of additional debt.

Bioventus is currently finalizing an amendment to its existing credit and guaranty agreement to increase its current term loan to facilitate the closing of the acquisition.

The payments of the deferred amount are anticipated to be made from the company’s free cash flow and expansion of its existing credit facility.

The company had intended to offer $415 million of senior notes to fund the acquisition.

Official talk was for a yield in the mid-to-high 9% area.

However, the company pulled the offer out of the junk bond market, citing market conditions in early May.

Proceeds were also going to be used from the bond sale to pay down a revolver and term loan A.

Bioventus is a Durham, N.C. orthobiologics supplier. CartiHeal provides treatment for osteoarthritis and osteochondral defects of the knee.

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