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Apollo Endosurgery, Lpath to merge, focus on obesity treatments
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Apollo Endosurgery and Lpath have entered into a merger agreement to create a NASDAQ-listed medical device company that will focus on the development and commercialization of minimally-invasive interventional obesity treatments, according to a press release.
“Executing this transaction with Lpath is an expedient way to introduce our company to the public market. With the additional equity support we will receive from Apollo’s major investors as part of this transaction, we will have the resources to meet our near-term business needs,” Todd Newton, CEO of Apollo, said in the press release.
Closing is expected in the fourth quarter of the year, at which time Lpath will be renamed Apollo Endosurgery Inc., and the combined company will apply for a NASDAQ listing with a new trading symbol.
Lpath will issue new shares or rights to acquire its common stock to Apollo security holders, who will become the majority owners of Lpath with an expected 95.8% ownership of the combined company. The 4.2% remainder is expected to be owned by Lpath security holders, subject to adjustments described in the agreement.
Apollo’s major investors will invest $29 million of new equity in the combined company as part of the Apollo majority ownership.
Lpath’s directors and executive officers will resign at closing, after which Apollo’s team will lead the combined company and designate its board of directors.
“Following an extensive and thorough review of strategic alternatives, we have chosen to merge with Apollo because we believe the transaction provides Lpath stockholders with an attractive opportunity for value appreciation,” Gary Atkinson, Lpath’s CEO, said in the press release.
Apollo had $11.6 million in cash and $50 million in long-term debt at the end of June, and $68 million in consolidated revenue for the 2015 calendar year, according to the press release. Its products — including the Lap-Band system and the Orbera intragastric balloon — are available in more than 80 countries.
Both companies’ boards of directors unanimously approved the transaction, which is subject to closing conditions including stockholder approval. The agreement also contains termination rights for both companies.
Disclosures: Newton is employed by Apollo Endosurgery. Atkinson is employed by Lpath.