Florida – Aiming at ensuring its future, Florida-based medical equipment company Exactech declared that it has filed for bankruptcy as part of a complete reorganization plan. Renowned for its creative orthopedic devices and smart technology, the company signed an investor group into a restructuring support and asset purchase deal. Acting as a “stalking horse” bidder, this group will suggest to buy almost all of Exactech’s assets and offer vital financial support. This development coincides with Exactech’s continuous financial and legal challenges resulting from expensive product recalls of its hip and knee devices in past years.
Globally oriented, the company is well-known for providing orthopedic surgeons with innovative medical tools, implants, and the Active Intelligence® ecosystem—designed to maximize patient results. Exactech has encountered financial challenges resulting from significant liabilities linked to package recalls started between 2021 and 2022, despite the strength of its product portfolio and favorable development path. Potential problems in knee and hip implants sparked off these recalls, which resulted in expensive lawsuits and financial losses for the company.
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Darin Johnson, President and CEO of Exactech, acknowledged the impact of these liabilities, expressing a commitment to both patients and innovation.
“Our team has delivered strong performance and positive growth in 2024, and we are confident in the trajectory of our business,” said Darin Johnson in a news release. “However, despite the strength of the underlying business, we face unsustainable liabilities associated with knee and hip litigation related to the packaging recalls we voluntarily initiated between 2021 and 2022. We take our commitment to patient well-being very seriously and have provided substantial out-of-pocket patient reimbursements and surgeon support for related expenses.”
Filed in the U.S. Bankruptcy Court for the District of Delaware, Exactech’s decision to follow a court-supervised selling procedure marks a strategic change. Johnson clarified that this reorganization strategy is meant to lower Exactech’s debt load so that the business may eliminate non-operational debt and free new money for use in its activities. With around $85 million in finance promised by the investor group supporting this process, Exactech’s operational needs will be met throughout the bankruptcy processes.
Exactech’s investors’ “stalking horse” proposal provides a minimum offer for other possible purchasers, guaranteeing competitive bids that might lead to increased valuations or other benefits for stakeholders. Private equity and alternative asset management companies with significant medical device sector knowledge make up the Exactech supporting team.
Together, the companies have assets under control totaling more than $25 billion and provide expertise in many sectors, including manufacturing and medical technology. Their help is expected to stabilize Exactech during the reorganization process and provide conditions for long-term expansion.
Exactech included many “first-day” motions asking permission to maintain consistent business operations throughout the sale process in part of its original bankruptcy filings. Along with promises to pay sales agents and keep research and development initiatives, these motions involve the continuance of employee salary and benefit payments. The company has promised staff members as well as partners that it is still committed to provide creative orthopedic solutions and maintaining connections with its surgical partners
Johnson underlined that the reorganization would help Exactech’s finance sheet to enable the business to focus on its main goal of providing top-notch medical tools for orthopedic surgeons and their patients.
“The process we are commencing today is intended to help us create a stronger foundation for long-term growth with an improved balance sheet and new capital as well as ensure that we can continue providing innovative, industry-leading implants for surgeons and their patients for years to come.”
Ropes & Gray LLP, Centerview Partners, and Riveron RTS are offering legal and financial direction for the restructure effort. Appointed as the claims agent, Kroll will keep a restructuring website providing comprehensive information on the Chapter 11 procedures for interested parties. Kroll has also created hotlines for questions from American and foreign entities, therefore highlighting Exactech’s dedication to openness during the bankruptcy process.
Exactech’s leadership is hopeful that the reorganization will provide favorable outcomes even if the road ahead consists in legal obstacles and restructuring issues. The company wants to improve its position in the medical technology industry by concentrating on innovation and removing legacy obligations, thereby offering sustainable solutions for orthopedic experts and the patients depending on them.