WARSAW, Ind. and MONTREAL, Aug. 23 ZimmerHoldings, Inc. (NYSE: ZMH; SWX: ZMH), a leader in the orthopaedics industry,and ORTHOsoft Inc. (TSX-Venture: OSH), a leader in computer navigation fororthopaedic surgery, announced today that Zimmer has reached an agreement tomake an offer to acquire all of ORTHOsoft's outstanding common shares in acash transaction for CDN$1.10 per share (the "Offer"). The total purchaseprice, excluding the 12.4% of outstanding ORTHOsoft common stock currentlyheld by a Zimmer subsidiary, is approximately CDN$50,000,000.
According to Zimmer, the transaction will be funded out of operating cashflow and is expected to be completed in the fourth quarter of 2007. Zimmersaid it estimates the transaction to be approximately $0.01 dilutive toadjusted earnings per share in the fourth quarter of 2007, $0.03 dilutive in2008 and accretive thereafter.
"We look forward to welcoming ORTHOsoft's leadership team and skilledemployees to the Zimmer family," said David Dvorak, Zimmer President and CEO."Their commitment to innovation and customer support in computer-aidedsurgical navigation has won the high regard of surgeons in North America andEurope. This acquisition will support our SmartTools strategic initiative andwill allow us to vertically integrate our Zimmer(R) Computer AssistedSolutions (CAS) efforts, enabling us to direct future development and to applyCAS concepts across our various businesses."
Founded in 1995, ORTHOsoft develops and markets best-in-class medicalsoftware, instruments and computerized systems designed to help orthopaedicsurgeons increase accuracy in hip, knee and spine implant surgery.ORTHOsoft's FDA-approved patented software solutions are developed by surgeonsfor surgeons, resulting in intuitive and easy-to-use navigation that trackssurgical flow and provides surgeons with real-time data, thus helping toimprove the surgical process and patient outcomes. The company was recentlyselected in the "2006 TSX Venture 50," a ranking of the top emerging publiccompanies listed on that exchange.
"This transaction allows us to deliver significant value for ourshareholders while assuring that we will have an opportunity, through theglobal power of the Zimmer distribution network, to present our technology andexpertise to many new customers and markets. This acquisition will allow usto concentrate on specific applications for Zimmer products and provideoutstanding universal orthopaedic navigation solutions," said Dr. Louis-Philippe Amiot, Chairman, CEO and founder of ORTHOsoft.
ORTHOsoft's Navitrack(R) Navigation System is a comprehensive suite ofuniversal software tools for total knee and total hip replacement, now runningon a new platform, the Sesamoid(TM), and features industry-exclusive high-performance optical reflectors, the NavitrackER(TM). The Navitrack(R)FluoroSpine(R) System assists surgeons in precisely positioning pedicle screwsfor conventional and minimally invasive procedures in order to help reducecomplication rates resulting from implant misplacement. This in turn canpotentially help avoid long-term neurological deficits, reduce incidents ofimplant loosening and avoid reoperations.
Zimmer said it intends to maintain ORTHOsoft's current operations inMontreal and will integrate the company with its existing CAS organization.ORTHOsoft currently has 81 employees, most of whom are engaged in sales andproduct development.
The board of ORTHOsoft, after consulting with its financial and legaladvisors and the Special Committee of directors, has unanimously recommendedthat ORTHOsoft shareholders accept the Offer. Coady Diemar Partners LLC, asfinancial advisor to ORTHOsoft's Board, has provided a written opinion to theboard of ORTHOsoft that the consideration of CDN$1.10 under the Offer is fair,from a financial point of view, to ORTHOsoft shareholders (other than Zimmerand