Wright Medical and Tornier Merge in $3.3 Billion All-Stock Deal

And the orthopedic industry consolidation continues. Despite new government regulations, inversion deals remain alive and well in the medtech space.

Orthopedics firms Wright Medical Group Inc. and Tornier NV are merging in an all-stock deal with a combined equity value of approximately $3.3 billion.

The deal has been approved by both company boards of directors.

Wright shareholders will own about 52 percent of the combined company, called Wright Medical Group NV, and Tornier investors will have 48 percent. Each share of Wright will be exchanged for 1.0309 shares of Tornier. The new firm will be based in the Netherlands, Tornier’s home base—yet another inversion deals this year. Inversion deals happen when U.S. companies purchase overseas-based firms in an effort to take advantage of lower tax rates abroad.

The U.S. headquarters for the lower extremity and biologics business will be based in Wright’s existing facility in Memphis, Tenn., and its Augment bone graft team will continue to be based at its facility in Franklin, Tenn. The U.S. headquarters for the upper extremity business will be based within Tornier’s existing facility in Bloomington, Minn., and its U.S. engineering center in Warsaw, Ind.

The transaction is expected to close in the first half of 2015.

The merger of Wright and Tornier will create a midsize growth company with leading technologies and specialized sales forces in three of the fastest growing areas of orthopedics: upper extremities, lower extremities and biologics.

Robert Palmisano, Wright’s current CEO will lead the company, while Tornier CEO David Mowry will be chief operating officer.

At Monday’s close, Wright had a market value of $1.6 billion, while Tornier’s was $1.18 billion.

“This combination will create the premier Extremities-Biologics company with a broad global reach,” Palmisano said. “Together, we will have one of the most comprehensive upper and lower extremity product portfolios in the market, extending our leadership position and further accelerating our growth opportunities and path to profitability, all of which we believe will generate long-term value for our shareholders. In addition, this will provide our employees with opportunities for career growth and development as part of a much larger, dynamic organization.”

Mowry said: “Wright shares Tornier’s commitment to serving extremities specialists and building the leading global business in this market. Both companies have built a deep and loyal customer base and have highly complementary product portfolios, positioning the combined entity to deliver meaningful value to our shareholders. We believe that partnered together, Wright and Tornier will become the fastest-growing company in the extremities-biologics industry.”