aap sells Biomaterials Business for EUR 36 Million and becomes a pure player in trauma with innovative technologies

Press Release dated March 22, 2016

aap Implantate AG (“aap”) signed a notarized share purchase agreement today with a leading European private equity firm for the sale of 100% of the company shares in its subsidiary aap Biomaterials GmbH, which has its registered office in Dieburg. The purchase price is based on an assumed enterprise value of aap Biomaterials GmbH of EUR 36 million and will be due for payment after closing of the transaction. The closing of the transaction is subject to the market standard conditions precedent, which are to be met within the next three months. Upon closing of the transaction, the existing profit and loss transfer agreement between aap and aap Biomaterials GmbH will be terminated.

“The closing of the transaction is the final step in our consistently implemented strategy to transform aap into a pure player in trauma,” said Bruke Seyoum Alemu, Chairman of the Management Board of aap. “The divestment of our private label business leads to a focused business model which will enable us to better exploit the opportunities in the fast-growing global trauma market.”

The operation sold within the transaction (discontinued operation) consists of aap Biomaterials GmbH, which is specialized in the development, production and marketing of bone cements, mixing systems and related accessories, and aap’s distribution business in this area. In 2015, the operation sold recorded sales based on preliminary figures amounting to EUR 16.0 million.

The closing of the transaction will result in a positive one-time deconsolidation effect on the earnings level. The company plans to use part of the proceeds to finance further growth and to distribute part of them to its shareholders.

“Last year we had to stop the divestment process due to unacceptable closing conditions,” said Marek Hahn, Member of the Management Board (CFO) of aap. “This time we are pleased to have concluded the transaction on favorable terms and conditions. In a next step we will align the cost structure of the new aap with the strategy of a pure player in trauma.”

The complete consolidated and annual financial statements as of 31 December 2015 of aap will be published by 29 April 2016 the latest. The reason for the delay in the publication is the sale of aap Biomaterials GmbH, which must already be stated as a so-called discontinued operation in the consolidated financial statements for 2015. This leads to extensive reporting requirements in the notes and the management report as well as in various presentations of results in the consolidated financial statements.

Upon closing of the transaction, aap’s previous sales and EBITDA forecast for the 2016 financial year will be no longer valid. The company will publish a new and updated guidance for the current financial year after closing. In this context, aap aims to announce also further details regarding the use of a part of the proceeds for the benefit of the shareholders.

“As a pure player in trauma with innovative technologies we will now concentrate in particular on the extension of our trauma portfolio as well as the accelerated access to established and growth markets,” continued Bruke Seyoum Alemu. “It is a core element of our strategy to build a strong IP portfolio with a focus on unmet medical needs. Our IP protected technologies in the areas of silver coating and magnesium implants address problems in surgery that haven’t yet been resolved adequately.”

In the course of the transaction aap is advised by Altium Capital (M&A advice) and Taylor Wessing (legal advice).

This release contains forward-looking statements based on current experience, estimates and projections of the management board and currently available information. They are not guarantees of future performance. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Many factors could cause the actual results, performance or achievements of aap to be materially different from those that may be expressed or implied by such statements. These factors include those discussed in aap‘s public reports. Forward-looking statements therefore speak only as of the date they are made. aap does not assume any obligation to update the forward-looking statements contained in this release or to conform them to future events or developments

For further information, please contact:

aap Implantate AG
Lorenzweg 5
12099 Berlin

Fabian Franke
Manager Investor Relations
Tel.: +49 (0)30 / 750 19 134
Fax: +49 (0)30 / 750 19 290

Josh Sandberg

Josh Sandberg is the President and CEO of Ortho Spine Partners and sits on several company and industry related Boards. He also is the Creator and Editor of OrthoSpineNews.

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