Shares of SeaSpine Holdings Corp. (NASDAQ: SPNE) soared in pre-market trading on Tuesday as the spine and orthopedics company announced a merger with Orthofix (OFIX) in an all-stock deal.
According to the terms of the agreement, SeaSpine shareholders will receive 0.4163 shares of Orthofix common stock in return for every share held by them. The merger is expected to close in Q1 of next year.
After the close of the merger, Orthofix shareholders will own around 56.5% of the combined company while SeaSpine shareholders will own the remaining 43.5%.
The new company is expected to generate revenues of around $693 million as of the twelve months that ended September 30. The merger is anticipated to be accretive in terms of adjusted EBITDA to Orthofix by the second year following the close of the acquisition.
This transaction is also projected to generate $40 million of annualized cost savings within three years following the close of the transaction.
SeaSpine’s Preliminary Q3 Results
The company also announced its preliminary third-quarter results and expects total revenues to range from $66.7 million to $67.2 million, reflecting a year-over-year growth between 44% and 45%.
At the end of Q3, SPNE had cash and cash equivalents of $46.8 million.
The company also raised its fiscal guidance for FY22 and has now forecasted revenues to range between $236 and $238 million, indicating a year-over-year growth in the range of 23% to 24%.
SeaSpine’s earlier revenue guidance for FY22 was in the range of $234 million to $236 million.
What are SeaSpine Holdings Corp (SPNE) Stock Predictions?
SeaSpine scores a Strong Buy consensus rating from Wall Street analysts based on a unanimous six Buys. The average price target for SPNE stock is $15.40 implying an upside potential of 176.5% at current levels.
