Spineway : Acquisition confirmed for Latin America and Africa

SPINEWAY announces that the conditions precedent have been met and confirms its acquisition of an equity stake in INTEGRAL MEDICAL SOLUTIONS (IMS), a holding company at the head of a group of companies in the healthcare sector that is heavily involved in the management of hospitals in Latin America and Africa.

Strengthening Spineway’s positions

This equity stake as well as the partnership and distribution agreement to be entered into in the coming months with IMS and its affiliates will, in the short term, allow SPINEWAY to strengthen its positions in Latin America, which represented 50% of its sales in 2018, and significantly accelerate its growth in this region where the market is estimated at 150 million euros in 2019 (130 million in 20161).

In addition, the agreement will allow SPINEWAY to open its way into the African continent, with a market of over 1.2 billion residents and where the use of implants is ramping up in orthopedics and neurosurgery.

This closer relationship between upstream and downstream will provide SPINEWAY with opportunities to expand its product lines. Indeed, the IMS hospitals are heavy users of high-added-value products that SPINEWAY will be able to provide directly. With this improved visibility, SPINEWAY should benefit from more recurring income.

In conjunction with this structural project, SPINEWAY is pursuing its strategic plan with the redeployment of its activity in the US and repositioning of its products as Premium.

Staggered investment schedule

The transaction was the subject of a promise of sale by STRATEGOS GROUP LLC and a promise of purchase by SPINEWAY allowing for a staggered investment in IMS’s capital.

First, SPINEWAY will make a partial payment for an equity stake of 6.9% of IMS’s capital in four installments set for the following dates: 14 May 2019, 30 June 2019, 31 July 2019 and 31 August 2019. Then, in about three or four years, subject to financing being found for the balance of the IMS capital, SPINEWAY will have the option of increasing its stake to 52% of IMS’s capital, with the possibility of suspending this promise if it is unable to obtain suitable long-term financing, as well as for technical reasons beyond its control.

Subsequently, SPINEWAY has a promise of sale allowing it to acquire all of INTEGRAL MEDICAL SOLUTIONS’s capital in five years.

Creating a new group, a new business model

By acquiring this interest, SPINEWAY is undertaking a major transformation of its business model. This first step toward large-scale vertical integration will create a new group worth more than €80M in revenue based on the 2018 figures. This will allow SPINEWAY shareholders to be in on the ground floor of a new group in the healthcare field in high-growth locations with great potential.

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