Xtant Medical Holdings, Inc. (XTNT): M&A transaction — Xtant Medical acquires Coflex product line from Surgalign for $17M cash

On February 28, 2023, the Company entered into the Term Amendment No. 3, which provided an additional $5.0 million under the Term Credit Agreement

Seller agreed to sell to the Company, and the Company agreed to purchase from Seller, all of the issued and outstanding shares of common stock of Surgalign SPV, which shares constitute all of the outstanding equity of Surgalign SPV, for an aggregate purchase price of $17.0 million in cash (the “Purchase Price”). The closing contemplated by the Equity Purchase Agreement occurred on February 28, 2023 (the “Closing”).

In conjunction with the Equity Purchase Agreement, on February 28, 2023, the Company entered into a Transition Services Agreement (“Transition Services Agreement”) with Surgalign SVP and Seller, whereby Seller agreed to provide, or cause to be provided, to the Company and its affiliates on and after the effective date of the Equity Purchase Agreement, after giving effect to the Closing, certain transitional services related to the transition of the Coflex Business.

In addition to the Term Amendment No. 3., the Company entered into an Amendment No. 3 to Credit, Security and Guarantee Agreement (Revolving Loan) (“Revolving Amendment No. 3” and, together with the Term Amendment No. 3, the “Amendments No. 3”), which amends the Credit, Security and Guarantee Agreement (Revolving Loan), by and among the Company, as guarantor, and its subsidiaries, as borrowers, and MidCap Funding IV Trust, as agent, and the financial institutions party thereto (the “Revolving Credit Agreement”).

The Company funded the Purchase Price with cash on hand and approximately $5.0 million of indebtedness incurred under its Credit, Security and Guarantee Agreement (Term Loan) by and among the Company, as guarantor, and its subsidiaries, as borrowers, MidCap Financial Trust, as agent, and the financial institutions party thereto (the “Term Credit Agreement”), which was amended on February 28, 2023 pursuant to an Amendment No. 3 to Credit, Security and Guarantee Agreement (Term Loan) (“Term Amendment No. 3”) to provide such funding.

On February 28, 2023, Xtant Medical Holdings, Inc., a Delaware corporation (the “Company”), entered into an Equity Purchase Agreement (the “Equity Purchase Agreement”) with Surgalign SPV, Inc. (“Surgalign SPV”), a Delaware corporation and wholly owned subsidiary of Surgalign Spine Technologies, Inc., a Delaware corporation (“Seller”), Seller and Surgalign Holdings, Inc., a Delaware corporation, pursuant to which Seller agreed to sell to the Company, and the Company agreed to purchase from Seller, all of the issued and outstanding shares of common stock of Surgalign SPV, which shares constitute all of the outstanding equity of Surgalign SPV, for an aggregate purchase price of $17.0 million in cash (the “Purchase Price”).