XML 37 R25.htm IDEA: XBRL DOCUMENT v3.23.2
Merger and Acquisitions (Tables)
 6 Months Ended
Jun. 30, 2023
Business Combinations [Abstract]  
Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the acquisition date. Certain of the acquired assets and liabilities assumed were valued utilizing Level 3 inputs and assumptions. A final determination of the allocation of the purchase price to assets acquired and liabilities assumed has not been made and the following should be considered preliminary. Adjustments to the preliminary purchase price allocation could be material. The final determination is subject to completion of the Company's valuation of the assets acquired and liabilities assumed, including contingent liabilities and deferred income taxes, which it expects to complete within one year of the acquisition date.

(Unaudited, U.S. Dollars, in thousands)

 

Previously Reported

 

 

Adjustments

 

 

As Revised

 

 

Assigned Useful Life

Assets acquired:

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

29,419

 

 

$

—

 

 

$

29,419

 

 

 

Accounts receivable, net

 

 

35,313

 

 

 

—

 

 

 

35,313

 

 

 

Inventories

 

 

129,610

 

 

 

3,026

 

 

 

132,636

 

 

 

Prepaid expenses and other current assets

 

 

4,600

 

 

 

(10

)

 

 

4,590

 

 

 

Total current assets

 

 

198,942

 

 

 

3,016

 

 

 

201,958

 

 

 

Property, plant, and equipment, net

 

 

68,911

 

 

 

(48

)

 

 

68,863

 

 

 

Customer relationships

 

 

27,100

 

 

 

6,000

 

 

 

33,100

 

 

13 years

Developed technology

 

 

45,400

 

 

 

1,800

 

 

 

47,200

 

 

6 - 8 years

In-process research and development ("IPR&D")

 

 

5,600

 

 

 

150

 

 

 

5,750

 

 

Indefinite

Other long-term assets

 

 

20,472

 

 

 

29

 

 

 

20,501

 

 

 

Total identifiable assets acquired

 

$

366,425

 

 

$

10,947

 

 

$

377,372

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities assumed:

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

21,602

 

 

$

—

 

 

$

21,602

 

 

 

Other current liabilities

 

 

41,224

 

 

 

(920

)

 

 

40,304

 

 

 

Total current liabilities

 

 

62,826

 

 

 

(920

)

 

 

61,906

 

 

 

Long-term borrowings under SeaSpine credit facility

 

 

26,298

 

 

 

—

 

 

 

26,298

 

 

 

Other long-term liabilities

 

 

31,950

 

 

 

883

 

 

 

32,833

 

 

 

Total liabilities assumed

 

 

121,074

 

 

 

(37

)

 

 

121,037

 

 

 

Net identifiable assets acquired

 

$

245,351

 

 

$

10,984

 

 

$

256,335

 

 

 

Total fair value of consideration transferred

 

 

376,745

 

 

 

—

 

 

 

376,745

 

 

 

Residual goodwill

 

$

131,394

 

 

$

(10,984

)

 

$

120,410

 

 

 
Schedule of Estimated Fair Value of Consideration Associated with Merger

The total estimated fair value of consideration associated with the Merger as of the acquisition date was comprised of:

(Unaudited, U.S. Dollars, in thousands, except shares and price per share)

 

 

 

Share Consideration:

 

 

 

Orthofix common shares to be issued in exchange for SeaSpine common shares

 

 

16,047,315

 

Orthofix closing price per share as of January 4, 2023

 

$

22.76

 

Estimated fair value of shares issued in exchange for SeaSpine common shares

 

$

365,237

 

Estimated fair value of Orthofix stock options and RSUs issued in exchange for outstanding SeaSpine equity awards

 

$

11,508

 

Total estimated fair value of consideration

 

$

376,745

 
Summary of Pro Forma Financial Information The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the Merger closed as of January 1, 2022.

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(Unaudited, U.S. Dollars, in millions)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net sales

 

$

187.0

 

 

$

174.4

 

 

$

362.2

 

 

$

331.5

 

Net income (loss)

 

$

(30.1

)

 

$

(27.1

)

 

$

(75.3

)

 

$

(69.9

)
Summary of Integration Costs Incurred The following table summarizes integration costs incurred for the three and six months ended June 30, 2023, and 2022.

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(Unaudited, U.S. Dollars, in millions)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Compensation-related integration costs

 

 

3.5

 

 

$

—

 

 

 

13.8

 

 

$

—

 

Fee paid to financial advisor to the Merger

 

 

—

 

 

 

—

 

 

 

5.5

 

 

 

—

 

Professional fees / consulting fees

 

 

0.7

 

 

 

—

 

 

 

5.0

 

 

 

—

 

Product rationalization charges

 

 

4.2

 

 

 

—

 

 

 

4.9

 

 

 

—

 

Other costs to complete

 

 

(0.3

)

 

 

—

 

 

 

1.2

 

 

 

—

 

Total

 

 

8.1

 

 

$

—

 

 

 

30.4

 

 

$

—

 
Summary of Restructuring Costs The table below provides a summary of restructuring costs incurred during the period and the resulting liability as of June 30, 2023, which is recognized within other current liabilities:

 

(Unaudited, U.S. Dollars, in millions)

 

Balance as of
December 31, 2022

 

 

Charges Incurred

 

 

Payments Made

 

 

Balance as of
June 30, 2023

 

Severance costs

 

$

—

 

 

$

10.4

 

 

$

(4.4

)

 

$

6.0

 

Retention costs

 

 

—

 

 

 

2.8

 

 

 

(0.2

)

 

 

2.6

 

Payroll taxes

 

 

—

 

 

 

0.4

 

 

 

(0.1

)

 

 

0.3

 

Total

 

$

—

 

 

$

13.6

 

 

$

(4.7

)

 

$

8.9