Replidyne and Cardiovascular Systems (CSI) have entered into a definitive merger agreement under which CSI will merge with Replidyne in an all-stock transaction.
The move will allow CSI to become a publicly-traded company without having to complete an initial public offering. The St. Paul, Minn.-based company filed to go public in January, with plans to raise $86.2 million. However, it withdrew its IPO Tuesday, in conjunction with the merger announcement.
Under terms of the agreement, the Louisville, Colo.-based Replidyne said it will issue new shares of its common stock to CSI shareholders, whereby former CSI shareholders are expected to own 83 percent of the combined company, and Replidyne shareholders are expected to own 17 percent of the combined company on a fully diluted basis, using the treasury stock method, subject to adjustments as described in the merger agreement.
“Executing this transaction with Replidyne is an expedient way to take our company into the public market and generate a capital infusion for future growth. With an estimated $35 million to $40 million in additional cash and investments from the merger, we can further expand our sales and marketing organization and infrastructure to drive revenue growth and continue to invest in product development for future market expansion,” according to David L. Martin, president and CEO of CSI.
The boards of directors of both Replidyne and CSI have unanimously approved the transaction, which is subject to customary closing conditions, including approval by the shareholders of each of Replidyne and CSI. The companies said that the merger agreement contains certain termination rights for both Replidyne and CSI.