RTI Surgical Holdings Inc (NASDAQ: RTIX) was a major gainer in yesterday’s trading session. The stock gapped up and closed the day with gains of 63.41%. This came after it announced an agreement to sell its OEM business to Montagu Private Equity LLP.
Under the terms of the agreement, Montagu will buy the OEM business for a total of $490 million. $480 million of it will be received in cash, and the rest in other considerations. The company announced that its board was unanimous in approving the deal. Nonetheless, the deal needs the approval of the company’s shareholders, regulatory approvals, and other conditions. The company expects the deal to close within H1 of 2020. The company further announced that, once the deal is closed, it will focus more on global innovation, and growth. It also announced that, money from the deal will be used to pay debts and capitalize its global spine portfolio.
The CEO, Camille Farhat stated that, the sale marked the end of phase 1 of the company’s strategic change that is aimed at cutting complexity, drive operational excellence, and push up growth of the company’s business. He added that, the company was excited about the transaction because it created value, and also because the business was sold to an experienced investor.
He further added that, the deal now makes RTI a worldwide pure-play spine company with good fundamentals and positive long-term growth prospects. He also stated that, the company’s global spine business has generated between $118 million and $119 million in gross revenues, in 2018 and that it expects margins of about 75% in 2019. On top of that, the CEO stated that the business will now be debt-free, and will have about $175 million to $200 million in cash on its balance sheet.
From a look at its price action, the stock gapped up and opened at $5.40. It then traded between a low of $4.36 and a high of $5.40 before closing the day at $4.51. Volumes in the day stood at 9.78 million.
About RTI Surgical Holdings Inc
RTI Surgical Holdings Inc is a manufacturer of surgical implants. It is based in Deerfield, Illinois.