By Lisa Kerner
Charlotte, N.C., July 16 - DJO Inc. agreed to be acquired by an affiliate of ReAble Therapeutics, Inc. in a deal valued at $1.6 billion including debt.
A definitive agreement between the two companies calls for DJO shareholders to receive $50.25 per share in cash. The offer price is a 25% premium over DJO's average closing share price for the 30 trading days ended July 13.
DJO has a 50-day go-shop period for superior proposals. An $18.7 million break-up fee is included in the agreement.
An affiliate of the Blackstone Group is the controlling shareholder of ReAble and has committed to provide the equity financing needed to complete the transaction, a company news release stated.
DJO's board, along with its transaction committee, unanimously approved the agreement and recommends that DJO stockholders approve the merger. The transaction is expected to close in the fourth quarter of 2007.
The companies both offer complementary products in orthopedic rehabilitation and pain management for an "absolutely compelling" strategic fit, according to ReAble chief executive officer Ken Davidson in a news release.
DJO was advised by Wachovia Securities and Latham & Watkins LLP. ReAble was advised by Credit Suisse and Simpson Thatcher & Bartlett LLP.
Vista, Calif.-based DJO specializes in rehabilitation and regeneration products for the non-operative orthopedic, spine and vascular markets.
ReAble, located in St. Louis, manufactures and distributes orthopedic devices to musculoskeletal conditions resulting from degenerative diseases, deformities, traumatic events and sports-related injuries.
| Acquirer: | ReAble Therapeutics, Inc.
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| Target: | DJO Inc.
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| Transaction total: | $1.6 billion
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| Price per share: | $50.25
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| Break-up fee: | $18.7 million
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| Announcement date: | July 16
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| Expected closing: | Fourth quarter of 2007
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| Stock price for target: | NYSE: DJO; $42.10 on July 13
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