Information on the Target

The Trendlines Group is excited to announce the complete acquisition of its portfolio company, ApiFix, by OrthoPediatrics. ApiFix specializes in non-fusion treatment solutions for progressive adolescent idiopathic scoliosis. The acquisition agreement was finalized and closed on April 1, 2020, with Trendlines retaining an 18.62% stake in ApiFix at the time of closing.

Shareholders of ApiFix will collectively receive 934,783 new common shares of OrthoPediatrics stock and a cash payout of $2 million at closing, in addition to guaranteed milestone payments and an earnout over a four-year period, potentially totaling at least $67 million. This transaction represents Trendlines' largest exit by value since its initial public offering in 2015.

Industry Overview in Israel

Israel is renowned for its advanced medical technology sector, which is characterized by innovative solutions that address various healthcare challenges. The industry benefits from a robust ecosystem of startups, research institutions, and established medical device companies driven by a culture of entrepreneurship and supportive government policies. This environment fosters the rapid development of cutting-edge treatments and medical devices.

Israel's medical device industry has gained international recognition, particularly in areas such as orthopedics, cardiology, and diagnostics. The country's focus on research and development, combined with its skilled workforce, enables it to produce high-quality medical technologies. Furthermore, collaborations between academia and industry have paved the way for significant advancements in medical equipment and surgical techniques.

Among these advancements is the field of scoliosis treatment, where companies like ApiFix are making significant strides. Patients suffering from scoliosis often require surgical interventions, and innovative solutions like non-fusion technologies are gaining traction, offering alternatives that could improve the quality of life for adolescents while minimizing long-term complications.

The Rationale Behind the Deal

The acquisition of ApiFix by OrthoPediatrics is strategically aligned with OrthoPediatrics’ goal to advance pediatric orthopedic care. As a leader in this field, OrthoPediatrics recognizes the potential of ApiFix’s innovative Minimally Invasive Deformity Correction (MID-C) system, which provides significant advantages over traditional methods, such as reduced surgery time and improved recovery outcomes.

By integrating ApiFix's technology, OrthoPediatrics can enhance its product offerings and strengthen its position in a growing market. The synergy created from this acquisition is expected to drive further innovation and expansion, particularly in non-fusion therapies, which are increasingly sought after by healthcare providers.

Information About the Investor

OrthoPediatrics is a company dedicated exclusively to the advancement of pediatric orthopedics. With a focus on improving the outcomes and experiences of children undergoing orthopedic treatments, OrthoPediatrics brings expertise and a comprehensive understanding of the specific needs within this demographic. The company specializes in developing instruments and implants tailored for children, ensuring that their solutions are both effective and appropriate for younger patients.

As an investor, OrthoPediatrics is well-positioned to capitalize on the growing demand for innovative and effective orthopedic solutions in pediatrics. The company’s commitment to research and development, combined with its extensive distribution network, enables it to successfully introduce new technologies to market, thereby enhancing its growth potential.

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The acquisition of ApiFix by OrthoPediatrics appears to be a commendable investment that has been met with enthusiasm in the medical community. With its innovative MID-C system, ApiFix can significantly contribute to the landscape of non-fusion scoliosis treatment, which is increasingly favored due to its improved patient outcomes. This strategic move reinforces OrthoPediatrics' commitment to providing advanced orthopedic solutions for children.

Moreover, the financial structure of the acquisition, which includes potential milestone payments and earnouts, indicates that both parties are optimistic about ApiFix's future performance and growth in the pediatric orthopedic sector. This aligns with the trend of investing in companies that showcase strong intellectual property and technological advancements.

Considering the robust ecosystem for medical innovation in Israel and the escalating global demand for effective scoliosis treatments, this acquisition places OrthoPediatrics in an advantageous position to lead in pediatric orthopedic care. The combination of ApiFix's innovative technology and OrthoPediatrics' established market presence is likely to yield fruitful results in terms of growth and development.

In conclusion, the acquisition not only signifies a strategic alignment of two reputable entities in the pediatric orthopedic space but also serves as a pathway for enhanced care options for patients suffering from scoliosis. As the market continues to evolve, this deal could very well be remembered as a pivotal moment in advancing pediatric scoliosis treatment.

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