ApiFix Ltd, a portfolio company of The Trendlines Group, has been 100% acquired by Nasdaq-traded OrthoPediatrics Corp.

The deal was signed and closed on 1 April 2020. Trendlines held 18.62% of ApiFix at closing.

This is Trendlines' largest exit since its IPO on SGX in November 2015.

Trendlines said the total value of the Acquisition, in the form of cash and common shares of OrthoPediatrics stock (NASDAQ: KIDS) including anniversary payments but not including the fourth year earnout is approximately US$67 million

Trendlines’ proportionate part of the minimum consideration is estimated at US$13.2 million before earnout.


News of the acquisition sent the stock price of Trendlines up about 21% in afternoon trading today.

ApiFix is focused on non-fusion treatment of progressive adolescent idiopathic scoliosis. Its acquirer is 
focused exclusively on advancing the field of pediatric orthopedics.

Milestones

Total consideration

Trendlines’ consideration

At closing

934,783 new common OP shares + US$2.0 million in cash

187,257 shares + $150,000

Earlier of 150 surgeries or 2nd anniversary*

US$13 million (at least 25% in cash)

~ US$2,420,600

3rd anniversary

US$8 million (at least 25% in cash)

~ US$1,489,600

4th anniversary

US$9 million (at least 25% in cash)

~ US$1,675,800

4th year earnout

Year 4 trailing 12-month revenue X 2.25, less US$17 million (3rd and 4th year milestone payments); Trendlines’ share will be 18.62% of this

Trendlines’ share of the minimum consideration estimated at US$13.2 million before earnout


ApiFix shareholders are to receive:

• an aggregate of 934,783 new common shares of OrthoPediatrics stock (NASDAQ: KIDS). Based on its last closing price of US$37.63 per share, the 934,783 shares are valued at US$35 million.

• an aggregate of 
US$2 million cash at closing, plus

• 
guaranteed milestone payments (in the form of cash and OrthoPediatrics shares) and

• 
an earnout over a period of four years.

Trendlines stock price 

8.9 c

52-week range

5.4 – 13.8 c

Market cap

S$70.4 m

PE (ttm)

--

Dividend yield 

--

P/B

0.37

Year-to-date 
return

-14%

Shares outstanding

791 m

Source: Yahoo!

Trendlines will provide further updates as and when it receives its proportionate share of the milestone payments and/or earnout payments.

The exit by Trendlines from its direct shareholdings of ApiFix pursuant to the Acquisition had contributed positively to the consolidated earnings per share and net assets per share of the Group for the financial year ended 31 December 2019.

For the financial year ending 31 
December 2020, Trendlines’ ApiFix holdings will be converted into cash, short- and long-term receivables, and short- and long-term investments.

Information about ApiFix
ApiFix system1.16The ApiFix system for treating scoliosis has the U.S. Food and Drug Administration (FDA) and CE Mark approvals. NextInsight file photoFounded in 2011 with investment from and the active involvement of Trendlines, in addition to support from the Israel Innovation Authority, ApiFix is officed at Trendlines’ Israel headquarters and in Boston, Massachusetts.

ApiFix is a leading motion-preservation scoliosis correction 
company; their Minimally Invasive Deformity Correction (MID-C) system has U.S. Food and Drug Administration (FDA) and CE Mark approvals.

When compared to both traditional spinal fusion and 
tethering procedures, the benefits of the MID-C system include measurable reductions in surgery time, blood loss, hospitalization, recovery time, and complication rates.

Most significantly, the 
system is removable and avoids permanently limiting range of motion in these young patients.

ApiFix‘s unique technology has strong intellectual property protection, including 46 issued patents and 25 patent applications worldwide. The company is managed by Boston-based executive Paul Mraz who has nearly 30 years’ spine and orthopaedic medical device experience, and serial inventor and entrepreneur Uri Arnin, founding CEO, inventor, and current CTO – under the leadership of ApiFix board chairman, medical device industry executive, and investor, Ed Roschak.

Paul, Uri, and the entire Israel-based ApiFix team will join OrthoPediatrics.

Todd showcase“The acquisition of ApiFix by OrthoPediatrics will expand ApiFix’s business under the global leader of the pediatric orthopedics community. We look forward to OrthoPediatrics bringing market changing scoliosis treatment to pediatric patients worldwide with the ApiFix alternative that fills the treatment gap between non-operative therapies and irreversible spinal fusion.

"We are especially pleased to make this announcement in the time of COVID-19 – and worldwide uncertainty, demonstrating our unwavering commitment to growing shareholder value through creating and building companies to improve the human condition.” 

-- Trendlines’ Chairman and CEO, Todd Dollinger (photo)


More details in these PowerPoint slides.


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