OrthoPediatrics Corp. announces acquisition of Boston Orthotics & Prosthetics

OrthoPediatrics Corp. announced that it has acquired Boston Orthotics & Prosthetics. Additionally, in advance of the acquisition, the Company closed a debt financing with MidCap Financial which provides up to $80 million of capital, through the combination of a term loan and revolving loan, replacing its prior unused $50 million line of credit.

Boston Orthotics & Prosthetics is a profitable company offering leading bracing, orthotic and prosthetic technology for the non-operative treatment of children whose lives have been impacted by scoliosis, plagiocephaly, and various neuromuscular disorders. The custom, patient specific Boston Brace for Scoliosis, lower limb orthoses and Dynamic Movement Orthoses (DMO), as well as the Boston Band for plagiocephaly are among the most advanced, individualized braces available to treat pediatric orthopedic conditions today. Boston O&P’s products will expand OrthoPediatrics’ existing Specialty Bracing division (“OPSB”), a flagship house of brands and innovative products, to further penetrate the largest segments of the $500 million U.S. pediatric orthopedic specialty bracing market. It is estimated 80% of pediatric orthopedic care happens before and after surgery.

“We are thrilled to announce the acquisition of Boston O&P, an organization that shares our mission to help children whose lives have been impacted by orthopedic conditions. We are now the first company to have a role supporting the entire continuum of care for pediatric orthopedic patients. This opportunity significantly expands our newly launched OrthoPediatrics Specialty Bracing division and is reflective of the opportunity we saw with pediatric surgical implants at the Company’s founding. The large majority of pediatric orthopedic patients are not surgical candidates, and specialty bracing remains an underserved market. Boston O&P offers unique products designed specifically to address unmet pediatric needs in several of the largest non-surgical orthopedic treatment markets. Adding their complementary portfolio to our platform will offer additional options to our current surgeon customers to help manage patients before and after surgery,” said Dave Bailey, Chief Executive Officer of OrthoPediatrics.

Partnering with world class medical facilities, including Boston Children’s Hospital, Children’s Hospital of Philadelphia, Nationwide Children’s Hospital in Columbus, Ohio, and Phoenix Children’s Hospital, Boston O&P maintains 26 patient care clinics across the U.S. Boston O&P’s recent annual historical revenue is approximately $25 million.

“This acquisition enables us to serve more patients as an extension of our growth strategy to surround our pediatric orthopedic surgeon customers with the most comprehensive portfolio of pediatric orthopedic treatment devices. Mr. Bailey continued, “Combined, our businesses have helped over one million children globally and we look forward to helping the next million together by expanding the number of clinics and aggressively launching new products that meet unmet needs for children and their caregivers. Over time, we aspire to support all 300 high volume children’s hospitals in the U.S.”

Boston O&P General Manager, Tom Morrissey echoed his excitement for the transaction, stating “We are very excited and proud to be joining the OrthoPediatrics team. It is truly amazing how similar the two companies are and in our shared passion for taking care of kids. We remain committed to improving the quality of pediatric orthotic and prosthetic care and related products kids receive, and the resources OrthoPediatrics will provide can expedite greatly the achievement of that mission. We cannot wait to get started to build the new OrthoPediatrics’ newly launched Specialty Bracing division.”

Transaction details and debt financing
Under terms of the transaction, signed and closed on January 5, 2024, OrthoPediatrics has acquired Boston O&P for an upfront cash payment of $22 million. Post closing, OrthoPediatrics cash and restricted cash balance is approximately $60 million.

In advance of the acquisition, OrthoPediatrics entered into a new credit agreement with MidCap Financial, consisting of term loan and revolving loan. The term loan provides up to $30 million of capital and the revolving loan provides up to an additional $50 million, for a total availability of $80 million. The credit agreement replaces the previously unused $50 million line of credit with Squadron Capital. In advance of the acquisition, OrthoPediatrics drew an initial $10 million from the term loan.
MB Bureau