ATEC Calls Off EOS imaging Acquisition

Carlsbad, California-based Alphatec Holdings, Inc. (ATEC) has terminated its agreement to acquire EOS imaging, SA due to the ongoing market effects of the COVID-19 pandemic.

On February 26, 2020, medical device company Alphatec Holdings entered into an agreement to acquire EOS imaging for a purchase price of up to $88 million, plus $33.9 million retirement of debt, in a combination of cash and equity. The transaction was expected to close in the third quarter of 2020.

ATEC also terminated its commitment letter with Perceptive Credit Holdings III, LP for up to $160 million in secured debt financing, which was intended to retire the company’s existing credit facilities and fund the cash required to complete the acquisition of EOS.

In its SEC filing, ATEC stated that its decision to terminate was based upon its “consideration and analysis of the expected ongoing market effects of the COVID-19 pandemic, including the magnitude and duration of its impact on capital equipment priorities and purchases in significant EOS markets, including the United States.” ATEC concluded that a “Material Adverse Effect,” as defined in its Tender Offer Agreement had occurred, resulting in circumstances that are no longer conducive to completion of the acquisition. Alphatec notified EOS of its decision to terminate in a letter dated April 24, 2020.

“This has been a difficult, disappointing decision,” said ATEC Chairman and CEO Pat Miles. “Both companies have worked so hard and so cooperatively, over many months, to bring this transaction together.”

Miles continued, “On behalf of the entire ATEC Family, I want to personally thank EOS for its commitment and hospitality throughout this process. It has been a thrill for me and other members of ATEC leadership to engage directly with so many of the talented EOS team members, and to see firsthand their prowess and passion for their work—attributes both our companies share. While the acquisition is no longer feasible as contemplated, I continue to believe that ATEC’s and EOS’s interests are best served through a strategic collaboration. I have shared my belief with EOS leadership, and look forward to the opportunity to continue to explore ways that our companies can work together to bring informed operative experiences to spine.”

EOS imaging is a Paris, France-based orthopedic medical imaging company. EOS systems are full body skeletal imaging systems able to generate 3D images and data. EOS imaging has gone through a period of expansion since becoming a publicly traded company on Euronext Paris (EOSI) in 2012. EOS systems are available in 51 countries including the United States, Japan, and China.

For OTW’s coverage of the ATEC/EOS imaging deal, see “ATEC to Acquire EOS imaging for Nearly $122 Million.”