Above is a scene from Nextremity Solutions Inc.’s grand opening in July of 2021 in the Warsaw Tech Park. On Monday, March 7, the company announced it has been sold to a Swiss firm that plans to expand locally. InkFreeNews photo by Dan Spalding.

By Dan Spalding
InkFreeNews

WARSAW — Nextremity Solutions Inc. has been acquired by a Swiss orthopedic firm that plans to expand operations in Warsaw.

Medartis, a Swiss-based orthopedic company for head and extremity surgery, announced Monday its intentions to acquire Nextremity Solutions, Inc., which opened its new headquarters and manufacturing facility less than a year ago in the Warsaw Tech Park along US 30.

As a result of the acquisition, Medartis indicated it will significantly expand its distribution network and training in the United States and rely heavily on the Nextremity Solutions’ facility.

The modern 69,500-square-foot production area is expandable and will be used to serve the regional market needs. This will improve the natural currency hedge of the company and provide design transfer opportunities, the news release said.

In a news release, officials describe Nextremity Solutions as “an excellent strategic fit for Medartis, creating significant new growth opportunities in the U.S. extremities market. Based on external market research, the $2 billion US foot and ankle market is among the fastest-growing areas in orthopedics due to new treatment concepts and demographic trends.

With this acquisition, Medartis gains access to a highly dedicated and experienced R&D team, strong relationships to US design surgeons and industry thought leaders, a complementary product pipeline, IP portfolio, product knowledge, and a modern regional manufacturing base. 

The transaction is expected to be completed in the first half of 2022.

The first additional products with significant sales potential are expected to be launched in early 2023, the news release said.

Nextremity Solutions CEO, Rod K. Mayer, who has been in the orthopedic business for over 40 years, said the partnership is an exciting opportunity.

“Medartis has an excellent reputation among U.S. upper extremity surgeons. By pooling our resources, we will make our current solutions available to more doctors and introduce further innovations to improve treatment options. We are excited to join a company that shares similar values to ours. We are both innovation- and precision-focused, work intensively with design surgeons, and are committed to patient well-being,” Mayer said.

Warsaw Mayor Joe Thallemer said he was alerted to the move by Mayer early Monday morning. 

“I’m thrilled with what’s going on,” Thallemer said.

“We value our relationship with this homegrown company,” Thallemer said. “The city made an investment in them to get them into the tech park. It was a good move on the city’s part to show our ability to support them and watch what they’ve done.”

Mayer was equally complimentary in an email to InkFreeNews. “We certainly are thankful for the support and it will continue to provide a favorable return on investment on a go-forward basis,”  he said.

Medartis CEO Christoph Brönnimann offered his reaction:

“In the US we strengthened our sales distribution and invested into training and education capabilities. The acquisition of Nextremity Solutions is a great strategic and cultural fit. The new R&D center and modern manufacturing facility in the US will be a catalyst to accelerate our extremities business in the US and potentially elsewhere. I am delighted that CEO Rod K. Mayer and his leadership team will stay with the company, complementing our local management team and working with us to grow our US business.”

The total purchase price will be up to $70 million. Besides an initial cash payment of USD 40 million at closing, the purchase agreement includes milestone and earn-out payments of up to $30 million linked to the timing of product launches and achievement of certain sales targets, the news release said.

This shared risk profile will allow Medartis to invest significant additional amounts in a dedicated foot & ankle franchise to be built over the next 3 years. The funding of the acquisition can be financed from existing cash resources and future cash flow. Additional financing options are also being examined.

Monday’s announcement comes just a few weeks after Medtronic announced on Feb. 24 that it found an orthopedic company to lease its building as Medtronic plans to phase out operations in Warsaw. In addition to that – one day later – another local orthopedic company, Danco Medical, announced that it had been acquired by Linotek, a company in Italy.