RTI Biologics buying Michigan manufacturer in $130M deal
Published: Wednesday, June 12, 2013 at 12:16 p.m.
Last Modified: Wednesday, June 12, 2013 at 12:16 p.m.
RTI Biologics is in the process of buying Pioneer Surgical Technology, a Michigan-based implant manufacturer with 300 employees worldwide, in a deal worth $130 million.
With the acquisition announced Wednesday, RTI will add synthetic and metal surgical implants to its portfolio of implants manufactured from human donated tissue and animal tissue. The deal will also expand the company's worldwide distribution network.
Pioneer, based in Marquette, Mich., has several offices in the U.S. and in Houten, The Netherlands.
RTI headquarters are in Alachua with facilities in Germany and France.
"This acquisition will bring immediate scale, allowing us to reach our strategic goals and take advantage of growth opportunities more quickly than either company could do independently," RTI President and CEO Brian Hutchison said in a news release.
Pioneer's distribution network will be beneficial when RTI launches its map3 cellular allogeneic bone graft later this year, Hutchison said.
The deal is expected to be completed in the third quarter of the year pending regulatory approvals. The combined company will have a new name.
RTI trades on the Nasdaq stock exchange under the symbol RTIX. The stock opened trading Wednesday morning at $4.44 per share after the announcement, up $0.04 from Tuesday's close.
Pioneer is a privately owned company with a 110,000-square-foot precision machine shop in Marquette, Mich., and a manufacturing facility in Greenville, N.C., that makes biologic products such as bone grafts.
It also has European headquarters in The Netherlands and a sales center in Germany.
The company makes implants for spine, trauma, biologics and cardiothoracic markets available in 18 countries with a growing distribution network in Europe, Asia and Latin America. It had sales of $88 million in 2012 with average annual revenue growth of 12 percent over the past three years.
Of Pioneer's approximately 300 employees, nearly 100 work outside of the U.S.
The company was founded in 1992 by Dr. Matthew Songer, an orthopedic surgeon who invented a spinal cable.
RTI has 790 employees, including more than 500 in Progress Corporate Park in the city of Alachua. The combined company will have about 1,100 employees.
The acquisition will be funded through a combination of $80 million in secured credit from TD Bank, TD Securities USA and Regions Bank; $50 million from private equity firm Water Street Healthcare Partners; and cash on hand.
RTI formed by spinning off from the University of Florida Tissue Bank in 1998 as Regeneration Technologies Inc. and went public in a stock offering in 2000. It took the name RTI Biologics in 2008 after merging with Alachua-based Tutogen Medical in a $205 million stock-for-stock deal that brought with it an animal tissue processing plant in Germany and a sales office in France.
RTI had record revenues of $178.1 million in 2012. In January, the company broke ground on a new $14 million, 41,000-square-foot building adjacent to its existing buildings in Alachua that will give the company more than 200,000 square feet of lab and office space there.