Brian Martin, Martin P. Hall, Jr. and Thomas E. Johnston entered into a membership interest purchase agreement to acquire Stability Biologics, LLC from MiMedx Group, Inc. (NasdaqCM:MDXG) on August 18, 2017. The consideration includes $21.2 million net of transaction costs and a promissory note issued by Stability Biologics in the principal amount of $3.5 million in favor of MiMedx, and a waiver by the former stockholders of Stability Inc. of all claims and rights to any earn-out consideration mentioned under the January 13, 2016 agreement. At closing, MiMedx shall deliver a payment in an amount equal to $0.05 million to Stability in order to provide Stability with working capital after closing.
The transaction is subject to conditions including each of Brian Martin, Thomas Johnston and Martin P. Hall, Jr. shall have executed and delivered a restrictive covenant agreement with MiMedx, Stability shall have executed and delivered to MiMedx a transition services agreement, Stability shall have executed and delivered to MiMedx a private label distributor agreement and distributor agreement pursuant to which Stability will purchase and sell MiMedx products and MiMedx shall have caused to be delivered the resignations of all officers of Stability. The transaction is expected to be completed in the third quarter of 2017. The transaction is expected to be accretive to GAAP earnings by $0.02 per fully diluted common share on an annualized basis. David W. Ghegan of Troutman Sanders LLP acted as legal advisor for MiMedx Group, Inc. A. Josef DeLisle of Miller & Martin PLLC acted as legal advisor for Stability, Brian Martin, Martin P. Hall, Jr. and Thomas E. Johnston. Rich Cockrell of Cockrell Group acted as public relations advisor for MiMedx.