Orthofix shareholder does not support sale of Blackstone Medical, rejects Ramius' proposal

By Lisa Kerner

Charlotte, N.C., Feb. 19 - Orthofix International NV shareholder Venner Capital SA is opposed to a proposal by fellow shareholder Ramius LLC calling for changes to the Orthofix board. Venner also objects to Ramius' suggested sale of the company's Blackstone Medical business.

In a Feb. 18 letter to Ramius, Venner group chairman Robert Gaines-Cooper said he is "convinced that a spine strategy in which Blackstone Medical plays a central role will be a crucial driver of success for Orthofix."

Gaines-Cooper was chairman of the Orthofix board from 1987 until his retirement in 2006. Blackstone Medical was acquired in 2006.

"The Blackstone Medical acquisition was not without challenges, of course, but the company has taken decisive remedial actions and bold steps forward and Blackstone Medical is now, I believe, poised for a solid 2009 and beyond," Gaines-Cooper said in the letter to Ramius.

Gaines-Cooper also expressed his confidence in Orthofix chairman James Gero and noted Gero's large investment in Orthofix stock.

"I believe the board and the management team is already showing exciting progress in executing on the strategic plan they have put in place," Gaines-Cooper said.

According to Gaines-Cooper, Orthofix's recently released full-year 2008 results and 2009 guidance demonstrate "substantial improvement in the operating performance of the spinal implant and biologic business, along with increased revenue, a higher gross profit margin and lower adjusted operating expenses." The company also made "substantial progress" on its debt obligations, the letter said.

Gaines-Cooper noted that Orthofix accelerated the launch date of Trinity Evolution by two months. Trinity Evolution is the next-generation adult stem cell-based allograft developed in collaboration with the Musculoskeletal Transplant Foundation, Gaines-Cooper said.

In addition, Orthofix initiated the limited market release of two new products, the Firebird pedicle screw system and the Pillar SA interbody device.

Ramius garners support for meeting

As previously reported, Orthofix's board voted to call a special general meeting of shareholders after Ramius delivered shares representing about 55% of the company's outstanding stock in support of such a meeting.

The purpose of the meeting, to be held April 7, is to make changes to the company's board.

Ramius wants to remove Gero, Peter Hewet, Alan Milinazzo and Walter P. von Wartburg from the board and replace them with:

• J. Michael Egan, chief executive officer of Steadman Hawkins Research Foundation, an orthopedic research organization;

• Peter A. Feld, Ramius managing director;

• Steven J. Lee, president of SL Consultant Inc., a private investment firm and hedge fund; and

• Charles T. Orsatti, managing partner of Fairfield Capital Partners, Inc., a private equity fund.

The qualifications of Feld, a 29-year-old Ramius employee, and Lee, founder of PolyMedica Corp., have been called into question by Orthofix.

Orthofix is a Curacao, the Netherlands Antilles-based diversified orthopedic products company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.