Biotech Values

[DewDiligence]

SYK Acquires VITA for $3.85/sh in Cash

[The buyout price is a 41% premium to Friday’s close, but is 63% *below* VITA’s IPO price of $10.50 in 1998. VITA never lived up to its early expectations and this is yet another merger spawned by failure. (As an aside, VITA was owned by the HQH/HQL funds while it was still private.)]

http://finance.yahoo.com/news/Orthovita-Inc-Agrees-To-Be-bw-2366284207.html?x=0&.v=1

›Monday May 16, 2011, 8:00 am EDT

MALVERN, Pa.--(BUSINESS WIRE)-- Orthovita, Inc. (Nasdaq:VITA) today announced that it has entered into a merger agreement under which Stryker Corporation (NYSE:SYK) has agreed to acquire all of the common stock of Orthovita for $3.85 per share in cash which represents a total value of approximately $316 million.

William E. Tidmore, Chairman of the Board, said, “The Board of Directors unanimously concluded that this transaction is in the best interests of Orthovita and its shareholders. We believe this is a very positive outcome for our shareholders and maximizes the value of Orthovita’s orthobiologic and biosurgery platforms.”

“This transaction is a great event for our shareholders, customers and employees,” said Antony Koblish, President and Chief Executive Officer. Mr. Koblish added, “This transaction delivers significant value to our shareholders and allows us to combine our portfolio of orthobiologic and biosurgery products as well as our novel and unique proprietary biomaterials pipeline with Stryker’s industry-leading sales and marketing teams. We look forward confidently to an exciting future with a great partner.”

Under the terms of the merger agreement, Stryker will commence an all-cash tender offer to acquire all of the outstanding common stock of Orthovita for $3.85 per share within 10 business days. The tender offer is expected to be completed in the second quarter of 2011. The tender offer is subject to customary closing conditions, including the tender of a majority of the outstanding shares of Orthovita common stock on a fully diluted basis, and the expiration or termination of the Hart-Scott-Rodino Antitrust Improvements Act waiting period. Following the tender offer, Stryker will acquire the remaining outstanding shares of Orthovita common stock through a second step merger.

Orthovita’s board of directors has approved the tender offer and resolved to recommend that Orthovita shareholders tender their shares to Stryker in the tender offer. In addition, shareholder Essex Woodlands Health Ventures Fund VII, L.P., whose representative R. Scott Barry is a member of Orthovita’s Board of Directors, as well as Messrs. Tidmore and Koblish and all of Orthovita’s other directors and executive officers, who collectively own approximately 14.5% of the fully diluted common stock of Orthovita, have committed to tender their shares in the tender offer.

J.P. Morgan Securities, LLC acted as exclusive financial advisor to Orthovita in connection with the transaction.

…About Orthovita, Inc.

Orthovita, Inc. is a specialty spine and orthopedic company with a portfolio of orthobiologic and biosurgery products. Our products are based on novel and unique proprietary biomaterials that have innovative mechanisms of action in the body. Our orthobiologic platform offers products for the fusion, regeneration and fixation of human bone. Our biosurgery platform offers products for controlling intra-operative bleeding, also known as hemostasis. Our current fusion and regeneration products are based on our proprietary Vitoss™ Bone Graft Substitute technology and address the non-structural bone graft market with synthetic, bioactive alternatives to patient- and cadaver-derived bone tissue. Cortoss™ Bone Augmentation Material, an injectable, polymer composite that mimics the mechanical properties of weight-bearing human cortical bone, provides the basis for our fixation portfolio. Our hemostasis portfolio includes Vitagel™ Surgical Hemostat, a proprietary, collagen-based matrix that controls bleeding and facilitates healing, and Vitasure™ Absorbable Hemostat, a plant-based product that can be deployed quickly throughout surgery. For more information about Orthovita, please visit www.orthovita.com.

About Stryker Corporation

Stryker Corporation is one of the world’s leading medical technology companies and is dedicated to helping healthcare professionals perform their jobs more efficiently while enhancing patient care. Stryker offers a diverse array of innovative medical technologies, including reconstructive, medical and surgical, and neurotechnology and spine products to help people lead more active and more satisfying lives. For more information about Stryker, please visit www.stryker.com.‹