Misonix acquired by Bioventus: fairness opinion by J.P. Morgan and Perella Weinberg Partners
Deal terms
Each Misonix share converted, at holder election, into either $28.00 in cash or 1.6839 shares of Bioventus class A common stock, subject to proration such that aggregate cash equals $10.50 multiplied by the number of outstanding Misonix shares. Implied per share value of $28.00 calculated as $10.50 cash plus 1.0524 Bioventus shares valued at the seven-day VWAP of $16.63 as of July 27, 2021.
Implied value per share by method vs. $28.00 offer
Ranges as disclosed in the banker’s summary of analyses; the red line marks the per-share consideration.
Opinion of J.P. Morgan to the target board
Discounted cash flow assumptions
Excluding cost synergies: $18.50-$28.60. Including cost synergies (adding 50% of implied equity value of Misonix projected cost synergies, using 0.0% perpetual growth and 11.1% discount rate; synergy DCF used 0.0%-1.0% perpetual growth and 10.1%-12.1% discount rates): $23.50-$33.60. Separate Bioventus DCF using Adjusted Bioventus Street Forecasts (July 1, 2021-Dec 31, 2025), 2.5%-3.5% perpetual growth and 10.0%-12.0% discount rates, implied $17.10-$25.70 per Bioventus share.
Selected public companies (17)
ConvaTec Group plc · Integra LifeSciences Holdings Corporation · ConMed Corporation · NuVasive, Inc. · Avanos Medical, Inc. · AxoGen, Inc. · Orthofix Medical Inc. · SurModics, Inc. · Vapotherm, Inc. · Anika Therapeutics, Inc. · Intersect ENT, Inc. · Sientra, Inc. · Globus Medical, Inc. · Hill-Rom Holdings, Inc. · ICU Medical, Inc. · Merit Medical Systems, Inc. · Medacta Group SA
| Multiple | Peer low | Peer median | Peer high | Range applied | Implied per share |
|---|---|---|---|---|---|
| FV / 2021E Revenue (Misonix peers) | 1.5x | 4.9x | 7.1x | 2.6x–7.1x | $11.20–$30.20 |
| FV / 2022E Revenue (Misonix peers) | 1.5x | 4.5x | 6.3x | 2.5x–6.3x | $15.60–$38.20 |
| FV / 2021E Revenue (Bioventus peers) - implied Bioventus per share | 1.5x | 3.8x | 9.1x | 1.5x–4.9x | $8.30–$31.10 |
| FV / 2022E Revenue (Bioventus peers) - implied Bioventus per share | 1.5x | 3.3x | 8.2x | 1.5x–4.6x | $9.50–$32.80 |
| FV / 2021E EBITDA (Bioventus peers) - implied Bioventus per share | 12.5x | 19.6x | 35.0x | 12.5x–35.0x | $14.50–$42.90 |
| FV / 2022E EBITDA (Bioventus peers) - implied Bioventus per share | 11.1x | 17.1x | 24.1x | 11.1x–24.1x | $15.10–$34.40 |
Selected precedent transactions (10)
| Date | Target | Acquirer | Multiple |
|---|---|---|---|
| 2020-12-18 | BioTelemetry, Inc. | Royal Philips | 5.4x FV / NTM Revenue |
| 2019-11-04 | Wright Medical Group N.V. | Stryker Corporation | 5.3x FV / NTM Revenue |
| 2018-12-13 | Buffalo Filter LLC | Conmed Corporation | 7.5x FV / NTM Revenue |
| 2018-08-30 | K2M Group Holdings, Inc. | Stryker Corporation | 4.3x FV / NTM Revenue |
| 2017-06-28 | The Spectranetics Corporation | Royal Philips | 6.6x FV / NTM Revenue |
| 2016-12-02 | Vascular Solutions, Inc. | Teleflex Incorporated | 5.3x FV / NTM Revenue |
| 2016-06-07 | LDR Holding Corporation | Zimmer Biomet Holdings, Inc. | 5.1x FV / NTM Revenue |
| 2014-05-27 | AngioScore Inc. | The Spectranetics Corporation | 3.7x FV / NTM Revenue |
| 2013-12-08 | Given Imaging Ltd. | Covidien plc | 4.0x FV / NTM Revenue |
| 2013-04-29 | Conceptus, Inc. | Bayer Healthcare LLC | 6.7x FV / NTM Revenue |
| Multiple | Low | Median | High | Range applied | Implied per share |
|---|---|---|---|---|---|
| FV / NTM Revenue | 3.7x | 5.3x | 7.5x | 3.7x–7.5x | $16.10–$31.80 |
Other analyses
| Analysis | Summary | Implied per share |
|---|---|---|
| Discounted Cash Flow Analysis (including cost synergies) | Misonix DCF adjusted by adding 50% of the implied equity value of projected cost synergies (0.0% perpetual growth, 11.1% discount rate) | $23.50–$33.60 |
| Bioventus Discounted Cash Flow Analysis | DCF of Bioventus using Adjusted Bioventus Street Forecasts, 2.5%-3.5% perpetuity growth, 10.0%-12.0% discount rates; compared to Bioventus seven-day VWAP of $16.63 | $17.10–$25.70 |
| Relative Implied Exchange Ratio Analysis | Implied exchange ratios: Trading multiples Misonix FV/2021E Revenue vs Bioventus FV/2021E EBITDA 0.2611x-2.0828x; Misonix FV/2022E Revenue vs Bioventus FV/2022E EBITDA 0.4535x-2.5298x; DCF (excl. synergies) 0.7198x-1.6725x; compared to exchange ratio of 1.6839x | — |
| Intrinsic Value Creation Analysis | Compared implied standalone DCF equity value of Misonix to implied equity value attributable to existing Misonix holders in the pro forma combined company; indicated hypothetical incremental implied value of 47% to Misonix holders | — |
Transaction fee of approximately $8 million, of which $1 million payable upon delivery of opinion and the balance upon closing. Aggregate fees over prior two years from Misonix approx. $2 million and from Bioventus/Bioventus LLC approx. $3.25 million.
Opinion of Perella Weinberg Partners to the acquirer board
Discounted cash flow assumptions
Standalone Misonix DCF: $26.55-$38.54. Including Cost Savings: $42.28-$60.62. Separate Bioventus DCF (2H CY2021E-CY2025E, 7.75%-8.75% discount rates, 3.0%-4.0% perpetuity growth) implied $22.52-$33.99 per Bioventus share, translating to a Bioventus DCF Implied Offer Value Range for Misonix of $34.20-$46.27 (1.0524x plus $10.50).
Selected public companies (15)
Alphatec Holdings, Inc. · Anika Therapeutics, Inc. · Axogen, Inc. · CONMED Corporation · Globus Medical, Inc. · Integra LifeSciences Holdings Corporation · NuVasive, Inc. · Organogenesis Holdings Inc. · Orthofix Medical Inc. · SeaSpine Holdings Corporation · Surgalign Holdings, Inc. · Vericel Corporation · Apyx Medical Corporation · MiMedx Group, Inc. · PolarityTE, Inc.
| Multiple | Peer low | Peer median | Peer high | Range applied | Implied per share |
|---|---|---|---|---|---|
| EV / 2021E Revenue (Misonix peers) | 2.7x | 5.5x | 21.3x | 4.5x–9.0x | $19.14–$40.45 |
| EV / 2022E Revenue (Misonix peers) | 3.3x | 5.4x | 16.4x | 4.5x–7.5x | $22.31–$39.50 |
| EV / 2021E Revenue (Bioventus peers) - implied Bioventus per share | 1.0x | 4.7x | 21.3x | 3.8x–6.0x | $24.36–$42.03 |
| EV / 2022E Revenue (Bioventus peers) - implied Bioventus per share | 0.9x | 4.3x | 15.6x | 3.3x–5.3x | $23.61–$41.12 |
| EV / 2021E Adj. EBITDA (Bioventus peers) - implied Bioventus per share | 13.8x | 24.3x | 34.9x | 24.0x–29.0x | $29.83–$38.62 |
| EV / 2022E Adj. EBITDA (Bioventus peers) - implied Bioventus per share | 11.2x | 21.2x | 24.1x | 21.0x–24.0x | $30.66–$37.48 |
Selected precedent transactions (19)
| Date | Target | Acquirer | Multiple |
|---|---|---|---|
| 2021-03 | Lumenis Ltd. (Surgical Business) | Boston Scientific Corporation | 5.4x EV / NTM Revenue |
| 2021-01 | Preventice Solutions, Inc. | Boston Scientific Corporation | 7.8x EV / LTM Revenue |
| 2021-01 | Cantel Medical | Steris plc | 4.3x EV / LTM Revenue |
| 2020-12 | BioTelemetry, Inc. | Koninklijke Philips N.V. | 6.2x EV / LTM Revenue |
| 2020-12 | ACell, Inc. | Integra LifeSciences Holdings Corporation | 4.0x EV / LTM Revenue |
| 2020-10 | Key Surgical | Steris plc | 5.0x EV / NTM Revenue |
| 2020-07 | Medicrea International | Medtronic plc | 7.6x EV / LTM Revenue |
| 2020-01 | Arthrosurface, Inc. | Anika Therapeutics, Inc. | 3.4x EV / LTM Revenue |
| 2019-11 | Wright Medical Group N.V. | Stryker Corporation | 5.8x EV / LTM Revenue |
| 2019-07 | Hu-Friedy Manufacturing Co., LLC | Cantel Medical | 3.6x EV / LTM Revenue |
| 2019-05 | Vertiflex, Inc. | Boston Scientific Corporation | 18.0x EV / LTM Revenue |
| 2019-03 | MyoScience, Inc. | Pacira Pharmaceuticals Inc. | 40.3x EV / LTM Revenue |
| 2018-12 | Buffalo Filter LLC | CONMED Corporation | 8.3x EV / LTM Revenue |
| 2018-08 | Cartiva, Inc. | Wright Medical Group N.V. | 18.0x EV / LTM Revenue |
| 2017-12 | Entellus Medical, Inc. | Stryker Corporation | 8.2x EV / LTM Revenue |
| 2017-10 | Jotec GmbH | CryoLife, Inc. | 4.4x EV / LTM Revenue |
| 2017-06 | Novadaq Technologies Inc. | Stryker Corporation | 7.8x EV / LTM Revenue |
| 2017-02 | ZELTIQ Aesthetics, Inc. | Allergan plc | 6.8x EV / LTM Revenue |
| 2016-02 | Sage Products LLC | Stryker Corporation | 6.5x EV / LTM Revenue |
| Multiple | Low | Median | High | Range applied | Implied per share |
|---|---|---|---|---|---|
| EV / LTM Revenue | 3.4x | 6.8x | 40.3x | 4.5x–8.5x | $17.75–$35.20 |
| EV / NTM Revenue | 3.8x | 5.9x | 12.4x | 4.0x–6.5x | $18.51–$31.53 |
Other analyses
| Analysis | Summary | Implied per share |
|---|---|---|
| Misonix Discounted Cash Flow Analysis (including Cost Savings) | Same DCF framework plus present value of approximately $20 million of cost savings and related cash flows | $42.28–$60.62 |
| Bioventus Discounted Cash Flow Analysis / Implied Offer Value | Bioventus DCF implied $22.52-$33.99 per Bioventus share; multiplied by 1.0524 plus $10.50 cash to derive Bioventus DCF Implied Offer Value Range for Misonix | $34.20–$46.27 |
| Bioventus Selected Companies - Implied Offer Value Ranges | 2021E revenue based implied offer value range $36.14-$54.74; 2022E revenue based $35.35-$53.78 (Bioventus implied value x 1.0524 + $10.50) | $35.35–$54.74 |
| Historical Stock Trading (52-week) | Misonix closing price ranged $11.04-$24.42 over the 52 weeks ended July 27, 2021 (closing $23.30); Bioventus ranged $10.74-$19.94 (closing $16.81). Reference data only. | $11.04–$24.42 |
| Equity Research Analyst Price Targets | Recent analyst price target for Misonix was $23.00 per share; Bioventus targets ranged $19.00-$23.00. Reference data only. | $23.00 |
Engagement letter dated July 21, 2021; $1.5 million payable on delivery of opinion (payable even if PWP determined it could not deliver an opinion) and an additional $3.5 million upon closing.
Management projections
| Projection year | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
|---|---|---|---|---|---|---|
| Revenue | $98.0M | $125M | $156M | $194M | $235M | 24.4% |
| Revenue growth | 22.5% | 28.0% | 24.7% | 24.0% | 21.0% | |
| EBITDA | $4.3M | $12.1M | $21.6M | $33.7M | $44.6M | 79.5% |
| EBITDA growth | — | 181.4% | 78.5% | 56.0% | 32.3% | |
| EBITDA margin | 4% | 10% | 14% | 17% | 19% | |
| Implied EV / EBITDA | 120.5x | 42.8x | 24.0x | 15.4x | 11.6x |
Year-1 growth is against LTM at announcement ($80.0M revenue, $-3.0M EBITDA); later years are year over year.
Two sets of Misonix management projections (fiscal years ending June 30, 2022-2026) were provided to the Misonix board and J.P. Morgan: preliminary (FY2022 revenue $98.0M / Adj. EBITDA $4.3M rising to FY2026 revenue $234.8M / Adj. EBITDA $44.6M) and revised (FY2022 revenue $98.2M / Adj. EBITDA $2.3M rising to FY2026 revenue $243.1M / Adj. EBITDA $45.7M, with unlevered FCF of $(9.7)M to $27.0M); J.P. Morgan was instructed to rely on the revised projections. Bioventus management separately used Adjusted Bioventus Street Forecasts (CY2021E revenue $413M / Adj. EBITDA $79M to CY2025E revenue $644M / Adj. EBITDA $147M) and Adjusted and Extrapolated Misonix Street Forecasts (CY2021E revenue $80M / Adj. EBITDA $(3)M to CY2031E revenue $304M / Adj. EBITDA $91M), which Perella Weinberg relied upon. Both parties also agreed on approximately $20 million of cost synergies realizable by the second full year after closing.
Process notes
Other Medical Devices and Supplies fairness opinions
- Hill-Rom Holdings / Baxter International 2021 · 17.6x EV/EBITDA
- Cantel Medical / STERIS 2021 · 16.2x EV/EBITDA
- SeaSpine Holdings / Orthofix Medical 2022
- Abiomed / Johnson & Johnson 2022 · 55.9x EV/EBITDA
- Apollo Endosurgery / Boston Scientific 2022
- Intersect ENT / Medtronic 2022
All Medical Devices and Supplies opinions → · J.P. Morgan opinions · Perella Weinberg Partners opinions