Houlihan Lokey Advises Bioness

Houlihan Lokey is pleased to announce that Bioness, Inc. (Bioness), a global leader in neuromodulation and rehabilitation medical devices, has been acquired by Bioventus, Inc. (NASDAQ:BVS) (Bioventus). The transaction closed on March 30, 2021.

Bioness, based in Valencia, California, was founded by the Alfred Mann Foundation in 2004 with the mission of helping improve lives and restore function for those living with peripheral pain and neurological deficit. Bioness is a category leader in rehabilitation solutions globally with the broadest portfolio of offerings, including proprietary electrical-stimulation exoskeletal devices for both the upper and lower extremities, robotic gait and fall safety systems, and high-tech, interactive software learning and recovery assessment platforms. These products play an essential role in helping patients regain mobility due to stroke, traumatic brain injury, multiple sclerosis, and osteoarthritis and are used by physical or occupational therapists in a clinical setting or by the patient at home with the guidance of a clinician through telemedicine.

Bioness’ StimRouter® PNS System is an emerging therapy for patients suffering from pain after surgery on an extremity, which affects over 16 million patients each year globally. The PNS market is experiencing significant growth, largely driven by a lack of effective alternatives and a desire to reduce opioid usage. StimRouter has been implanted in over 3,000 patients since 2017 and is sold in more than 10 countries, including the United States. Bioness’ patent-protected PNS technology is ideally suited to treat pain in the periphery, and StimRouter is the only PNS device backed by a randomized control trial.

Founded in 2012, Bioventus is a global leader in innovations for active healing. Bioventus delivers clinically proven, cost-effective products that help people heal quickly and safely. Its mission is to make a difference by helping patients resume and enjoy active lives. The Innovations for Active Healing from Bioventus include offerings for osteoarthritis and surgical and non-surgical bone healing. Built on a commitment to high-quality standards, evidence-based medicine, and strong ethical behavior, Bioventus is a trusted partner for physicians worldwide.

The acquisition of Bioness is directly aligned with Bioventus’ mission of helping patients regain active lifestyles and the strategy of accretive revenue growth through acquisitions that leverage Bioness' existing infrastructure. The total addressable market for medical devices currently marketed by Bioness is estimated to be more than $8 billion. The acquisition includes the entire portfolio of Bioness products as well as its research and development pipeline. Under the merger agreement, Bioness has become a wholly owned subsidiary of Bioventus, and all Bioness employees have become employees of Bioventus. The up-front consideration is being funded exclusively through the use of cash on hand.

In 2020, Bioness generated approximately $40 million in revenue and had loss from operations of approximately $14.0 million. Bioventus expects the acquisition to be accretive to Bioventus’ revenue, enhance its multi-year revenue growth profile, and have a positive contribution to net income (excluding purchase accounting and transaction costs) by the end of year one post-close.

Houlihan Lokey's Healthcare Group is among the largest dedicated healthcare investment banking groups in the country. In 2020, the group closed 22 transactions and was ranked the No. 1 M&A advisor for U.S. healthcare transactions under $1 billion by Refinitiv (formerly Thomson Reuters). Houlihan Lokey's Healthcare Group has closed more than 300 M&A healthcare transactions since inception.

Houlihan Lokey served as the exclusive financial advisor to Bioness and assisted in initiating, structuring, and negotiating the transaction on its behalf.