The proposed merger of ReAble Therapeutics, Austin, Texas, and DJO, Vista, Calif., would create a powerhouse orthopedic-device company capable of generating more than $900 million in annual revenue with at least 25% of those earnings coming from international sales, according to a letter sent to employees of both companies.
The letter, filed with the Securities and Exchange Commission late Thursday, also details plans for a company name change and a restructured executive leadership once the merger is complete. Although ReAble would provide chief leadership under the arrangement, the newly formed company would take the name DJO Inc., according to the SEC filing. Vista, Calif., would also be the new companys global headquarters.
Restructuring plans call for ReAble Chief Executive Officer Ken Davidson to become chairman of the new company. DJO President and CEO Les Cross will become CEO, and Peter Baird, currently group president of therapeutic devices for ReAble, will become president under the plan. At least three top executives will lose their jobs, with one expected to join the newly formed board of directors.
DJO shareholders would need to approve the proposed merger. While no date has been set, they are expected to meet in November to vote on the offer ReAble made in July to acquire outstanding shares of DJO common stock.
Company officials expect to complete the deal before year-end. -- by Shawn Rhea