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Anika Therapeutics enters agreements to acquire Parcus Medical, Arthrosurface

Anika Therapeutics Inc. entered into agreements to acquire sports medicine company Parcus Medical LLC and orthopedic medical device company Arthrosurface Inc.

Bedford, Mass.-based Anika will make an up-front cash payment of about $35 million to Parcus, with an additional $60 million upon reaching certain commercial milestones for the acquisition.

Under the agreement signed with Arthrosurface, Anika will pay an up-front cash payment of about $60 million, with an additional $40 million upon reaching certain regulatory and commercial milestones.

Anika provides orthopedic medicines for patients with degenerative orthopedic diseases and traumatic conditions. The company said the acquisitions will help broaden its product portfolio into joint preservation and restoration, add high-growth and diversified revenue streams, expand its research and development expertise and make its commercial capabilities stronger.

As part of the deals, the executive teams of Parcus and Arthrosurface led by President Mark Brunsvold and President and CEO Steven Ek, respectively, will join Anika continuing to lead the companies' business.

"Parcus Medical provides direct access to the high-growth ambulatory surgery center market, which will enable Anika to source new revenue streams, and Arthrosurface has an innovative product pipeline and an established direct hybrid sales model, which will accelerate our product platform strategy," Anika's president and CEO Joseph Darling said in a Jan. 6 news release.

Anika expects the acquisitions, which are subject to approvals by the unitholders and shareholders of Parcus and Arthrosurface, respectively, to be completed in the first quarter of the year.

Parcus Medical is expected to generate about $12 million to $13 million of revenue for the full year of 2019, an increase of about 15% compared to the prior year.

SVB Leerink LLC served as the exclusive financial adviser to Anika while Sullivan & Cromwell LLP served as Anika's legal counsel for the transactions.