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TranS1 Inc. Announces Agreement to Acquire Baxano, Inc. and $17.2M Financing Commitment



TranS1 Inc. Announces Agreement to Acquire Baxano, Inc. and $17.2M Financing
Commitment

         Conference Call to be Held on March 4, 2013 at 8:30 a.m. EST

   Combination Adds Rapidly Growing Minimally Invasive Spinal Decompression
                    Technology and Large Surgeon User Base

          Baxano Shareholders Commit $15.3M in Concurrent Financing

RALEIGH, N.C., March 4, 2013 (GLOBE NEWSWIRE) -- TranS1 Inc. (Nasdaq:TSON), a
medical device company focused on designing, developing and marketing products
to treat degenerative conditions of the spine affecting the lumbar region,
today announced that it has entered into a definitive agreement to acquire
Baxano, Inc., a privately-held medical device company that manufactures and
markets the iO-Flex® system utilized in standard spinal decompression surgery
and is developing the iO-Tome^TM system, a precision facetectomy instrument.

Merger Transaction

Under the terms of the merger agreement (the "Merger Agreement"), TranS1 Inc.
("TranS1" or "the Company") will issue approximately 10.4 million shares of
TranS1 Common Stock and pay $550,000 of cash (approximately $23.6 million of
value based on the March 1, 2013 closing price) to acquire Baxano, Inc.
("Baxano") (the "Merger Transaction"). The Company will also refinance $3.0
million of existing debt of Baxano in the transaction at closing. On a pro
forma basis, prior to the financing transaction discussed below, current
TranS1 shareholders will own approximately 72.4% of the combined company and
approximately 27.6% will be owned by current Baxano shareholders. The final
number of shares will be subject to certain adjustments at closing. The Merger
Transaction is currently expected to close early in the second quarter of 2013
and is subject to TranS1 shareholder approval and customary conditions to
closing as detailed in the Merger Agreement.

The Company believes that the strategic merit of the combined business
includes the following benefits to its shareholders:

  * Expands focus on minimally invasive lumbar spine treatments, with a
    combined addressable market opportunity of $3.9B
  * Complements existing proprietary product portfolio with differentiated
    patented products
  * Broadens sales force coverage and provides significant cross-selling
    opportunities within the MIS surgeon customer focus
  * Improves financial profile

"We believe that Baxano is a complementary strategic fit for our product
portfolio," said Ken Reali, President and Chief Executive Officer of TranS1.
"Minimally invasive treatments are the fastest growing segment of the spine
market. The combination of our AxiaLIF® and VEO^TM lumbar fusion products with
Baxano's iO-Flex and iO-Tome systems for lumbar direct decompression and
facetectomy, respectively, will allow us to better meet the needs of our spine
surgeon customers. This merger will create a unique company with the vision of
being a leader in providing less invasive and minimally invasive solutions for
spine disorders."

"We are enthusiastic about the combination of Baxano with TranS1," said Tony
Recupero, President and Chief Executive Officer of Baxano. "We believe the
combined company will have a compelling set of minimally invasive products to
benefit patients, surgeons, hospitals and payors and will continue to build on
the positive sales momentum we have built at Baxano over the past few years."

Baxano had revenues of $3.9 million and $9.4 million for the fiscal years
ended December 31, 2011 and 2012, respectively. On a pro forma basis, the
combined company's revenues were approximately $24.0 million (unaudited) for
the year ended December 31, 2012.

Financing Transaction

Contemporaneously with the execution of the Merger Agreement, TranS1 entered
into a Securities Purchase Agreement (the "Securities Purchase Agreement"),
pursuant to which the Company agreed to sell, conditioned on closing of the
Merger Transaction, approximately 7.5 million shares of the Company's common
stock at a price of $2.28 per share (the "Financing Transaction"), which will
result in net proceeds to the Company of approximately $17.2 million. The
Securities Purchase Agreement contains customary representations, warranties
and agreements of the Company and customary conditions to closing,
indemnification rights, obligations of the parties and termination provisions.

"At the closing of the acquisition and financing transactions, we expect to
have approximately $30 million in cash on the balance sheet," said Joe
Slattery, Executive Vice President and Chief Financial Officer of
TranS1. "With this additional capital, we are now in a position to demonstrate
meaningful revenue growth on a pro forma basis."

Required Approvals and Other Matters

The Merger Transaction was approved by the Board of Directors of TranS1 on
March 1, 2013, by the Board of Directors of Baxano on March 2, 2013, and by
the stockholders of Baxano pursuant to a written consent in lieu of a
stockholders' meeting on March 3, 2013. The Board of Directors of TranS1
approved the Financing Transaction on March 1, 2013. In addition, TranS1's
stockholders are required to approve the issuance of the Company's stock in
connection with each of the Merger Transaction and the Financing
Transaction. In connection with the execution of the Merger Agreement and the
Securities Purchase Agreement, certain directors, executive officers and
stockholders of the Company, who together hold approximately 24.2% percent of
the issued and outstanding common stock of the Company, have entered into
agreements whereby they have agreed to vote their shares in favor of the
issuance of the Company's stock in connection with each of the Merger
Transaction and the Financing Transaction.

After the Merger Transaction is complete, Ken Reali, President and Chief
Executive Officer of TranS1, and Joseph Slattery, Executive Vice President and
Chief Financial Officer, will continue to serve in their respective roles. The
combined company's corporate headquarters will be based in Raleigh, North
Carolina.

Pursuant to the terms of the Merger Agreement, the Company has agreed to
appoint two directors designated by Baxano to the Company's Board of
Directors, effective as of the closing of the Merger Transaction. Upon the
approval of the Merger Transaction by the Company's Board of Directors on
March 1, 2013, the Board also accepted Rick Randall's resignation from the
Board due to his need to devote attention to other opportunities.

Stifel is acting as exclusive financial advisor and Smith, Anderson, Blount,
Dorsett, Mitchell & Jernigan, L.L.P. is acting as legal counsel to
TranS1. Leerink Swann is acting as exclusive financial advisor and Morrison &
Foerster LLP is acting as legal counsel to Baxano.

Conference Call

TranS1 will host a conference call today at 8:30 am Eastern time to discuss
details of the acquisition and the strategic overview of the merged
companies. To listen to the conference call on your telephone, please dial
(877) 881-2183 for domestic callers and (970) 315-0453 for international
callers approximately ten minutes prior to the start time. The call will be
concurrently webcast. To access the live audio broadcast or the archived
recording, as well as the Company's presentation used during the conference
call, use the following link at http://ir.trans1.com/events.cfm.

About Baxano, Inc.

Baxano is a medical instrument company focused on designing, developing and
marketing innovative tools that restore spine function, preserve healthy
tissue, and enable a better quality of life for the patients it serves. Baxano
currently markets the patented iO-Flex system, a proprietary minimally
invasive set of flexible instruments allowing surgeons to target lumbar spinal
stenosis in all three regions of the spine: central canal, lateral recess, and
neural foramen, and has developed the patented iO-Tome instrument to rapidly
and precisely remove bone, including the facet joints, which is commonly
performed in spinal fusion procedures. Baxano was founded in 2005 and is
headquartered in San Jose, California. For more information, visit
www.baxano.com.

About TranS1 Inc.

TranS1 is a medical device company focused on designing, developing and
marketing products to treat degenerative conditions of the spine affecting the
lumbar region. TranS1 currently markets the AxiaLIF family of products for
single and two level lumbar fusion, the VEO lateral access and interbody
fusion system and the Vectre^TM posterior fixation system for lumbar fixation
supplemental to AxiaLIF fusion. TranS1 was founded in May 2000 and is
headquartered in Raleigh, North Carolina. For more information, visit
www.trans1.com.

Cautionary Statement

The Merger Transaction and Financing Transaction discussed above involve the
sale of securities in a private transaction that will not be registered under
the Securities Act of 1933, as amended, and will be subject to the resale
restrictions under that act. Such securities may not be offered or sold absent
registration or an applicable exemption from registration requirements. This
document does not constitute an offer to sell or a solicitation of an offer to
buy any securities, nor shall there be any sale of securities in any state or
jurisdiction in which such an offer, solicitation, or sale would be unlawful
prior to registration or qualification under the securities laws of any such
state or jurisdiction.

The pro forma financial measures presented in this press release combine
certain historical financial data of Trans1 and Baxano without adjustment and
are not necessarily indicative of what these entities' actual results of
operations or financial position would have been on a combined basis, nor are
they indicative of their future results of operations or financial position on
a standalone or a combined basis.

Forward Looking Statements

Statements in this press release regarding the proposed Merger Transaction
between the Company and Baxano, and the related Financing Transaction; the
expected timetable for completing the transactions; benefits and synergies of
the acquisition; future opportunities for the combined company; the strategy,
future operations, financial position, future revenues and projected costs;
prospects, plans and objectives of management; and any other statements about
the Company's management team's future expectations, beliefs, goals, plans or
prospects constitute "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, and are intended to qualify for the safe harbor from
liability established by the Private Securities Litigation Reform Act of
1995. Such statements are subject to risks and uncertainties that are often
difficult to predict, are beyond our control, and which may cause results to
differ materially from expectations. Factors that could cause our results to
differ materially from those described include, but are not limited to, the
ability to consummate the transactions, the ability to successfully integrate
our operations and employees, the ability to realize anticipated synergies and
cost savings, the ability to develop and maintain the necessary sales,
marketing, distribution and manufacturing capabilities to commercialize our
products, the pace of adoption of our product technology by spine surgeons,
the outcome of coverage and reimbursement decisions by the government and
third party payors, the success of our continuing product development efforts,
the effect on our business of existing and new regulatory requirements,
uncertainty surrounding the outcome of the matters relating to the subpoena
issued to the Company by the Department of Health and Human Services, Office
of Inspector General, stockholder class action lawsuits, and other economic
and competitive factors, and the other factors described in the Company's
filings with the Securities and Exchange Commission (the "SEC"), including its
Annual Report on Form 10-K for the year ended December 31, 2011 and subsequent
reports. You are cautioned not to place undue reliance on these forward
looking statements, which are based on TranS1's expectations as of the date of
this press release and speak only as of the date of this press release. We
undertake no obligation to publicly update or revise any forward looking
statement, whether as a result of new information, future events or otherwise.

Additional Information and Where to Find It

This communication may be deemed to be solicitation material in respect of the
Merger Transaction and Financing Transaction. The Company will file a proxy
statement and other documents regarding the Merger Transaction and Financing
Transaction described in this press release with the SEC. STOCKHOLDERS OF THE
COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING
THE COMPANY'S PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE MERGER TRANSACTION AND FINANCING TRANSACTION. Investors and
securityholders will be able to obtain the proxy statement and other relevant
documents free of charge at the SEC's website, http://www.sec.gov, and the
Company's stockholders will receive information at an appropriate time on how
to obtain the proxy statement and other transaction-related documents for free
from the Company. Such documents are not currently available.

The Company and its directors, executive officers, certain members of
management, and employees may have interests in the Merger Transaction and
Financing Transaction or be deemed to be participants in the solicitation of
proxies of the Company's stockholders to approve the issuance of the Company's
stock in connection with each of the Merger Transaction and the Financing
Transaction. Certain information regarding the participants and their interest
in the solicitation is set forth in the proxy statement for the Company's 2012
Annual Meeting of Stockholders filed with the SEC on April 30, 2012.
Stockholders may obtain additional information regarding the interests of such
participants by reading the proxy statement relating to the Merger Transaction
and Financing Transaction when it becomes available.

iO-Flex® and iO-Tome^TM are trademarks of Baxano, Inc.

CONTACT: Investors:
         TranS1 Inc.
         Joseph P. Slattery, 919-825-0868
         Executive Vice-President and Chief Financial Officer
         or
         Westwicke Partners
         Mark Klausner, 443-213-0501
         trans1@westwicke.com
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