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Alphatec acquires SafeOp Surgical; raises $50M via private placement

Alphatec Holdings Inc. said it acquired SafeOp Surgical Inc., a privately held provider of advanced neuromonitoring technology.

The company will pay SafeOp $15 million upfront in cash, a $3 million convertible note and will issue 3.3 million common shares and warrants to buy 2.2 million common shares at an exercise price of $3.50 apiece.

SafeOp will be eligible to receive an additional 1.3 million common shares, subject to the achievement of performance milestones.

In addition, the company is raising $50 million through a private placement of series B convertible preferred stock and warrants exercisable for common stock. Alphatec also entered a warrant exchange agreement with a holder of an existing warrant for an aggregate consideration of $4.8 million.

The placement was led by L-5 Healthcare Partners LLC, a healthcare-dedicated institutional investor, and included certain directors and executive officers of the company. It also included other new and existing institutional and independent investors.

Alphatec used a portion of the net proceeds and warrant exercise to fund the $15 million cash purchase price for SafeOp, and plans to use the remainder for general corporate purposes.

Raymond James & Associates Inc. is acting as placement agent in connection with the private placement and financing adviser in connection with the SafeOp acquisition.

Alphatec also appointed Luiz Pimenta as a chief medical officer. Pimenta is a spine surgeon with over 30 years of expertise.

The company said SafeOp's scientific principals Richard O'Brien and Robert Snow will join Alphatec as executives. O'Brien served as vice president of development and chief medical officer of SafeOp, while Snow has served as SafeOp's vice president of marketing for five years.

In addition, James Tullis, Jason Hochberg and Evan Bakst were added to the company's board. Tullis is founder and CEO of Tullis Health Investors, and Hochberg and Bakst are partners with L-5 Healthcare Partners.

Alphatec Holdings, through its unit Alphatec Spine Inc., is a medical device company that designs, develops and markets spinal fusion technology products and solutions for the treatment of spinal disorders associated with disease and degeneration, congenital deformities and trauma.