Symmetry Surgical will make strategic company moves in the near future, including selling part of the business and spinning off into another.
Here are five things to know about the new company structure:
1. Symmetry Surgical entered into a definitive agreement to sell its OEM Solutions business to Tecomet and concurrently transfer Symmetry Medical shareholders' ownership into a new company holding the Symmetry Surgical business. Tecomet — owned by Genstar Capital — is a contract manufacturing, engineering and metal fabrication technology company. The boards of both companies have approved the transaction.
2. Tecomet will acquire Symmetry Medical for $450 million in cash, or $7.50 per share after fees and eliminating outstanding debt. The transaction provides liquidity for Symmetry shareholders along with the potential upside of Symmetry Surgical's position in the large global market for surgical instruments. The company expects the transaction will be complete by the end of 2014.
3. Symmetry Surgical will become a newly-traded public company. Symmetry Medical shareholders of record will receive one share of the new public company for every four shares of Symmetry Medical stock. In the transaction, Stifel is the acting exclusive financial adviser to Symmetry Medical and Ropes & Gray is serving as Symmetry's legal counsel.
4. Symmetry Medical listed several reasons for the transaction, including recent transactions in the OEM Solutions competitive market; increased interest in orthopedics and the recent activity in the contract manufacturing sector; ending the competitive disadvantage Symmetry Medical had as the only public, substantially orthopedic OEM supplier in the industry with high customer concentration.
5. Symmetry Surgical can now pursue a broader surgical instrument market to optimize the company's sales channels and cost structure without the financial limitations associated with the company's current capital structure or potential conflicts with OEM customers. The tax-exempt spin-off will not create a tax liability at the corporate level, according to a company news release.
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