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Merger and Acquisitions (Tables) | 9 Months Ended
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Sep. 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 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. 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. Subsequent adjustments to the preliminary purchase price allocation could be material.
(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 |  |  | 132,636 |  |  |  | — |  |  |  | 132,636 |  |  |
Prepaid expenses and other current assets |  |  | 4,590 |  |  |  | — |  |  |  | 4,590 |  |  |
Total current assets |  |  | 201,958 |  |  |  | — |  |  |  | 201,958 |  |  |
Property, plant, and equipment, net |  |  | 68,863 |  |  |  | — |  |  |  | 68,863 |  |  |
Customer relationships |  |  | 33,100 |  |  |  | — |  |  |  | 33,100 |  |  | 13 years
Developed technology |  |  | 47,200 |  |  |  | — |  |  |  | 47,200 |  |  | 6 - 8 years
In-process research and development ("IPR&D") |  |  | 5,750 |  |  |  | — |  |  |  | 5,750 |  |  | Indefinite
Other long-term assets |  |  | 20,501 |  |  |  | — |  |  |  | 20,501 |  |  |
Total identifiable assets acquired |  | $ | 377,372 |  |  | $ | — |  |  | $ | 377,372 |  |  |
Liabilities assumed: |  |  |  |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 21,602 |  |  | $ | — |  |  | $ | 21,602 |  |  |
Other current liabilities |  |  | 40,304 |  |  |  | 3,040 |  |  |  | 43,344 |  |  |
Total current liabilities |  |  | 61,906 |  |  |  | 3,040 |  |  |  | 64,946 |  |  |
Long-term borrowings under SeaSpine credit facility |  |  | 26,298 |  |  |  | — |  |  |  | 26,298 |  |  |
Other long-term liabilities |  |  | 32,833 |  |  |  | — |  |  |  | 32,833 |  |  |
Total liabilities assumed |  |  | 121,037 |  |  |  | 3,040 |  |  |  | 124,077 |  |  |
Net identifiable assets acquired |  | $ | 256,335 |  |  | $ | (3,040 | ) |  | $ | 253,295 |  |  |
Total fair value of consideration transferred |  |  | 376,745 |  |  |  | — |  |  |  | 376,745 |  |  |
Residual goodwill |  | $ | 120,410 |  |  | $ | 3,040 |  |  | $ | 123,450 |  |  |
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 September 30, |  |  | Nine Months Ended September 30, |
(Unaudited, U.S. Dollars, in millions) |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Net sales |  | $ | 184.0 |  |  | $ | 181.1 |  |  | $ | 546.2 |  |  | $ | 512.6 |
Net loss |  | $ | (21.2 | ) |  | $ | (32.5 | ) |  | $ | (96.5 | ) |  | $ | (102.4 | )
Summary of Integration Costs Incurred | The following table summarizes integration costs incurred for the three and nine months ended September 30, 2023, and 2022.
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
(Unaudited, U.S. Dollars, in millions) |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Compensation-related integration costs |  | $ | 2.6 |  |  | $ | — |  |  | $ | 16.5 |  |  | $ | — |
International spine restructuring |  |  | 1.1 |  |  |  | — |  |  |  | 1.1 |  |  |  | — |
Fee paid to financial advisor to the Merger |  |  | — |  |  |  | — |  |  |  | 5.5 |  |  |  | — |
Professional fees / consulting fees |  |  | 0.2 |  |  |  | — |  |  |  | 5.2 |  |  |  | — |
Product rationalization charges |  |  | 1.3 |  |  |  | — |  |  |  | 6.1 |  |  |  | — |
Other costs to complete |  |  | 0.1 |  |  |  | — |  |  |  | 1.3 |  |  |  | — |
Total |  | $ | 5.3 |  |  | $ | — |  |  | $ | 35.7 |  |  | $ | — |
Summary of Restructuring Costs | The table below provides a summary of restructuring costs incurred during the period and the resulting liability as of September 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 September 30, 2023 |
Severance costs |  | $ | — |  |  | $ | 12.2 |  |  | $ | (5.2 | ) |  | $ | 7.0 |
Retention costs |  |  | — |  |  |  | 4.0 |  |  |  | (0.4 | ) |  |  | 3.6 |
Payroll taxes |  |  | — |  |  |  | 0.5 |  |  |  | (0.1 | ) |  |  | 0.4 |
Total |  | $ | — |  |  | $ | 16.7 |  |  | $ | (5.7 | ) |  | $ | 11.0 |

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