UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): December 30, 2003
Orthofix International N.V.
(Exact name of Registrant as specified in its charter)
Netherlands Antilles 0-19961 N/A
(State or other jurisdiction Commission File Number (I.R.S. Employer Identification
of incorporation) Number)
_____________________________
7 Abraham de Veerstraat
Curacao
Netherlands Antilles
011-59-99-465-8525
(Address of principal executive offices and telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets.
On December 30, 2003, a subsidiary of Orthofix International N.V.
("Orthofix") completed the previously announced acquisition of privately held
BREG, Inc. ("BREG"). The acquisition was completed pursuant to an acquisition
agreement among Orthofix, Trevor Acquisition, Inc., an acquisition subsidiary of
Orthofix ("Trevor"), BREG and a representative of the shareholders of BREG. In
the acquisition, Trevor merged with and into BREG, with BREG being the surviving
corporation of the merger and becoming an indirect wholly owned subsidiary of
Orthofix. The purchase price for the acquisition was approximately $159 million
after closing adjustments and after valuing the Orthofix common stock issued in
the transaction at current trading prices at the time of closing. The
acquisition was financed with $110 million of debt, cash on hand and the
issuance of 731,715 shares of Orthofix common stock.
Pursuant to a voting and subscription agreement dated as of November 20,
2003, as amended and restated as of December 22, 2003, among Orthofix and
certain significant shareholders of BREG, such shareholders agreed to vote in
favor of the acquisition and agreed to apply a portion of the
proceeds that they received from the acquisition to purchase, in the aggregate,
731,715 shares of Orthofix common stock.
BREG, based in Vista, California, designs, manufactures and distributes
orthopedic products for post-operative reconstruction and rehabilitative patient
use. Approximately 53% of BREG's 2002 revenues came from the sale of bracing
products, including: (1) functional braces for prevention of ligament injuries,
(2) load-shifting braces for osteoarthritic pain management, (3) post-operative
braces for protecting surgical repair and (4) foot and ankle supports that
provide an alternative to casting. Approximately 31% of BREG's 2002 revenues
came from the sale of cold therapy products used to minimize the pain and
swelling following knee, shoulder, elbow and back injuries or surgery.
Approximately 9% of BREG's 2002 revenues came from the sale of pain therapy
products used in conjunction with common sports medicine procedures such as
arthroscopy of the knee and shoulder for patient control over post-operative
pain management. BREG sells its products through a network of domestic and
international independent distributors.
Concurrently with the closing of the acquisition, Colgate Medical Limited
("Colgate"), an indirect wholly owned subsidiary of Orthofix, entered into a new
senior secured bank facility with a syndicate of financial institutions arranged
by Wachovia Securities. The senior secured bank facility provides for (1) a
five-year amortizing term loan facility of $110 million, the proceeds of which
were used for partial payment of the purchase price of BREG, and (2) a five-year
revolving credit facility of $15 million. Loans under the new senior secured
bank facility bear interest at a rate per annum equal to LIBOR or a prime rate,
plus a margin that is adjusted quarterly based on Colgate's leverage ratio. The
current interest rate on the term loan is set at LIBOR plus 2.75%, or 3.91%, per
annum. Orthofix and each of Colgate's direct and indirect subsidiaries,
including Orthofix Inc. and BREG, have guaranteed or will guarantee the
obligations of Colgate under the senior secured bank facility. The obligations
of Colgate under the bank facility and Colgate's subsidiaries under their
guarantees are secured by the pledge of their respective assets. Certain of
Orthofix's other subsidiaries have also guaranteed the obligations of Colgate
under the senior secured bank facility on a limited recourse basis. The credit
agreement contains certain negative covenants applicable to Colgate and its
subsidiaries, including restrictions on indebtedness, liens, dividends and
mergers or sales of assets. The credit agreement also contains certain financial
covenants, including a fixed charge coverage ratio, an interest coverage ratio
and a leverage ratio applicable to Colgate, and a leverage ratio applicable to
Orthofix.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Orthofix will provide the financial statements required by paragraph (a)
of Item 7 of Form 8-K, if any such information is required, on a Form
8-K/A on or before March 15, 2004.
(b) Pro forma financial information.
Orthofix will provide the pro forma financial information required by
paragraph (b) of Item 7 of Form 8-K, if any such pro forma financial
information is required, on a Form 8-K/A on or before March 15, 2004.
(c) Exhibits.
10.1 Acquisition Agreement dated as of November 20, 2003, among Orthofix
International N.V., Trevor Acquisition, Inc., BREG, Inc. and Bradley R.
Mason, as shareholders' representative.
10.2 Amended and Restated Voting and Subscription Agreement dated as
of December 22, 2003, among Orthofix International N.V. and
shareholders of BREG, Inc. identified on the signature pages thereto.
10.3 Credit Agreement dated as of December 30, 2003, among Colgate
Medical Limited, as borrower, and Orthofix International N.V and
certain subsidiaries of the borrower, as guarantors, certain limited
guarantors party thereto, the lenders parties thereto, Wachovia Bank,
National Association, as administrative agent, and Wachovia Capital
Markets, LLC, as sole lead arranger and book manager.
99.1 Press release dated December 31, 2003.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: January 7, 2004
ORTHOFIX INTERNATIONAL N.V.
By: /S/ THOMAS HEIN
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Name: Thomas Hein
Title: Chief Financial Officer