RESEARCH TRIANGLE PARK, N.C. - Asensus Surgical, Inc. (NYSE American: ASXC), a medical device company known for its digital surgery technologies, announced today that it is exploring a potential acquisition by KARL STORZ SE & Co. KG, a global medical technology company.
The preliminary agreement, a non-binding letter of intent, could lead to KARL STORZ acquiring all outstanding shares of Asensus at $0.35 per share, a 66.7% premium over the closing price on April 2nd, 2024.
The letter of intent follows Asensus Surgical's review of strategic alternatives, including collaborations, licensing transactions, a standalone strategy requiring significant capital, or a company sale. The company's board has approved the letter, which initiates a due diligence and negotiation period of up to ten weeks, during which Asensus will not seek other acquisition proposals.
In conjunction with this agreement, Asensus has secured a Bridge Loan from KARL STORZ, providing up to $20 million to support operations during the negotiation period and potential transaction process. This loan includes an immediate liquidity provision of $10 million, with the possibility of an additional $10 million if a definitive merger agreement is reached and stockholder approval is pursued.
If a definitive merger agreement is signed, Asensus will seek rapid stockholder approval and proceed to close the transaction as per the agreement's terms. A Transaction Committee has been established to evaluate the definitive merger agreement and advise the board before seeking stockholder approval.
However, there is no assurance that the negotiations will lead to a final agreement or that the proposed acquisition will occur. The transaction is subject to due diligence completion, negotiation of a definitive merger agreement, board and stockholder approval, and standard closing conditions.
Should the transaction be finalized, Asensus Surgical would become a private entity. If negotiations are terminated, or the definitive merger agreement is not executed, the Bridge Loan will need to be repaid to KARL STORZ within a set timeframe.
Asensus has appointed Jefferies LLC as its exclusive financial advisor for the transaction. The company has stated it will not provide further updates on the transaction unless a definitive agreement is reached or if discussions end.
This development is based on a press release statement from Asensus Surgical, Inc.
InvestingPro Insights
As Asensus Surgical, Inc. (NYSE American: ASXC) navigates through the potential acquisition by KARL STORZ SE & Co. KG, investors are closely monitoring the company's financial health and market performance. According to real-time data from InvestingPro, Asensus Surgical's financial metrics reveal a challenging landscape. As of the last twelve months as of Q4 2023, the company reported revenue growth of 21.02%, yet it is grappling with a negative gross profit margin of -53.38%, underscoring struggles in profitability. The company's stock has also seen significant volatility, with a 1-month price total return of -30.03%, reflecting investor uncertainty.
Two InvestingPro Tips that are particularly pertinent to the current situation include:
- Asensus Surgical holds more cash than debt on its balance sheet, providing some financial stability in the short term. This is a critical factor for investors to consider, especially in light of the potential acquisition and the need for liquidity.
- However, analysts do not anticipate the company will be profitable this year, which may affect long-term investment decisions and the company's ability to sustain operations without external funding or strategic actions like the proposed acquisition.
Investors seeking a more comprehensive analysis can find additional InvestingPro Tips at InvestingPro's dedicated ASXC page. Currently, there are 11 more tips available, providing deeper insights into Asensus Surgical's performance and prospects. For those considering an InvestingPro subscription, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, enriching your investment strategy with expert analytics and real-time data.
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