Exactech Expands Direct Distribution Abroad

Exactech, a developer of orthopedic implant devices, surgical instruments and biologic materials, announced yesterday the opening of a wholly-owned distribution subsidiary in Japan and the planned acquisition a distribution subsidiary in France.

Japan and France are two of the largest orthopedic device markets outside the U.S.

The move is part of a larger plan to aggressively grow direct sales. In early January, Exactech finalized its acquisition of North Carolina-based Altiva, an agreement that allowed the company to better leverage its sales and distribution channels in the spinal implant market.

France

France Medica SAS is an importer and distributor of orthopedic products and surgical supplies in France. The company has worked with Exactech for a number of years. In addition to distributing the Exactech’s Optetrak knee system, France Medica provides hips, shoulders, trauma products and instrumentation sets for clinics and hospitals.

France Medica’s purchase price is projected to be 6.8 million to 7.1 million euros (5.4 million euros to be paid upon closing and 1.4 million to 1.7 million euros in performance-based earn-out payments).

France Medica’s full year 2008 revenues will be approximately 8.0 million euros. Like the Altiva deal, Exactech expects the transaction to be neutral to earnings in 2008 and accretive in 2009. The closing should be complete in Q2 2008.

Japan

For over a decade, Exactech had been selling products through a distributor in Japan. A new arrangement will allow for the continuation of this relationship while also creating an opportunity for Exactech to expand its market presence in Japan with a new Tokyo-based in-house orthopedic sales team. The venture will be headed by Kunio Watanabe.

Last month, Exactech updated its 2008 targets for revenue to the range of $148 million to $156 million. The company will release fourth-quarter and year-end earnings after the market close today.

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