UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 31, 2006
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 0-26224 51-0317849
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
311 Enterprise Drive
Plainsboro, NJ 08536
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 275-0500
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITVE AGREEMENT.
On August 1, 2006, the Company's Board of Directors approved the Integra
LifeSciences Holdings Corporation Management Incentive Compensation Plan (the
"Plan"). The purpose of the Plan is to enhance the ability of the Company to
offer incentive compensation to employees at certain grade levels ("key
associates") by rewarding the achievement of corporate goals and specifically
measured individual goals which are consistent with and support the overall
corporate goals of the Company. The Company's executive officers with the title
of "Senior Vice President" are included among the key associates.
The Plan will be administered by the head of the Company's human resources
department, subject to oversight by the Compensation Committee. The
administrator shall have full authority to establish the rules and regulations
relating to the Plan, to interpret the Plan and those rules and regulations, to
select key associates to participate in the Plan, to determine the percentage of
base salary that each key associate is eligible to receive (the "Target Award
Percentage") if the targeted level of performance was achieved for the
performance goals during the performance period, to approve all of the awards,
to decide the facts in any case arising under the Plan and to make all other
determinations, including factual determinations, and to take all other actions
necessary or appropriate for the proper administration of the Plan, including
the delegation of such authority or power, where appropriate. With respect to
executive officers of the Company, the Compensation Committee shall have final
decision-making authority. The Company's Chief Executive Officer, other than
with respect to himself, also has the powers of the administrator and of the
Compensation Committee with respect to selecting key associates in the Plan and
determining each key associate's Target Award Percentage.
Prior to the beginning of a performance period, the administrator (or, as
appropriate, the Compensation Committee) shall determine the employees who shall
be key associates during that performance period and determine each key
associate's Target Award Percentage and Performance Goal or Goals (and how they
are weighted, if applicable) for that performance period. "Performance Goals"
for any performance period shall mean the performance goals of the Company
and/or the key associate's employer, as specified by the administrator in
consultation with the Company's executive committee, based on the achievement of
corporate EBITDA targets relating to the Company and/or the key associate's
employer's operating plan and global sales. In addition, performance goals for a
performance period will relate to the individual key associate's attainment of
performance goals that are specified for such key associate. The Performance
Goals may be weighted as to corporate and individual goals for each key
associate, as determined at the beginning of the performance period. The Plan
provides for specified Target Award Percentages to be used in the event no
Target Award Percentage is established prior to the performance period.
A key associate will earn an award for a performance period based on the level
of achievement of the Performance Goals established for that period. The amount
of the award may be increased as much as 50% above the target award based on the
extent to which the level of achievement of the Performance Goals exceeds the
target level for that Performance Period (to a maximum of 120% of the Target
Performance Goals), as specified at the time the Performance Goals are set for
that performance period. An award may also be reduced below the target award to
the extent the level of achievement of the Performance Goals is below target,
but at or above the minimum level for that performance period, at the time the
Performance Goals are established. A key associate will receive no award if the
level of achievement of all Performance Goals is below the minimum required to
earn an award for the applicable performance period (i.e., 90% of the Target
Performance Goals), as specified at the time the Performance Goals are
established.
Subject to certain exceptions, payment of the awards shall be made as soon as
administratively practicable following the close of such performance period, but
in no event later than March 15 of the calendar year following the performance
period; provided, however, that such payment may be delayed past March 15 of
such calendar year if the Compensation Committee determines that, as a result of
unforeseen circumstances beyond the Company's control, it is administratively
impracticable to make the payment by such date or that making the payment by
such date would jeopardize the solvency of the Company, then the payment will be
made as soon as administratively practicable after March 15.
The Company's Board of Directors or its Compensation Committee may amend and/or
terminate the Plan at any time.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
On July 31, 2006, the Company borrowed $34 million under its senior secured
revolving credit facility to partially fund the acquisition of Kinetikos
Medical, Inc. discussed below. As a result of this borrowing, the Company has
$100 million of outstanding borrowings under its credit facility as of the date
of this filing.
The outstanding borrowings have one-month interest periods. The weighted average
interest rate of the outstanding borrowings is 6.51%.
The credit facility requires the Company to maintain various financial
covenants, including leverage ratios, a minimum fixed charge coverage ratio and
a minimum liquidity ratio. The credit facility also contains customary
affirmative and negative covenants, including those that limit the Company's and
its subsidiaries' ability to incur additional debt, incur liens, make
investments, enter into mergers and acquisitions, liquidate or dissolve, sell or
dispose of assets, repurchase stock and pay dividends, engage in transactions
with affiliates, engage in certain lines of business and enter into sale and
leaseback transactions.
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS.
(d) On August 1, 2006, the Company appointed Neal Moszkowski, age 40, as a
director of the Company and to the Compensation Committee of the Company's Board
of Directors. The press release issued by the Company announcing this
appointment is attached as Exhibit 99.1 to this report.
Mr. Moszkowski serves as the Co-Chief Executive Officer of TowerBrook Capital
Partners, LP, a private equity investment company with more than $2.5 billion
under management. Prior to joining TowerBrook, Mr. Moszkowski was Managing
Director and Co-Head of Soros Private Equity, the private equity investment
business of Soros Fund Management LLC, where he served since August 1998. From
August 1993 to August 1998, Mr. Moszkowski worked for Goldman, Sachs & Co. and
affiliates, where he served as Vice President and Executive Director in the
Principal Investment Area. Mr. Moszkowski also currently serves as a director of
Wellcare Health Plans, Inc., Bluefly, Inc., Spheris, Inc. and JetBlue Airways
Corporation.
Mr. Moszkowski was a director of the Company from March 1999 to May 2005.
ITEM 8.01. OTHER EVENTS.
MODIFICATION OF EXCHANGE OFFER FOR 2 1/2% CONTINGENT CONVERTIBLE SUBORDINATED
NOTES DUE 2008
On July 31, 2006, the Company announced that it modified its offer in which
holders of its outstanding 2 1/2% Contingent Convertible Subordinated Notes due
2008 may exchange these notes for new 2 1/2% Contingent Convertible Subordinated
Notes due 2008.
A copy of this press release is filed herewith as Exhibit 99.2 and is
incorporated herein by reference.
ACQUISITION OF KINETIKOS MEDICAL, INC.
On July 31, 2006, Integra LifeSciences Corporation, a wholly owned subsidiary of
the Company, acquired Kinetikos Medical, Inc. ("KMI") for approximately $40
million in cash, subject to certain adjustments, including future payments based
on the performance of the KMI business after the acquisition.
A copy of the press release issued by the Company announcing the closing of the
transaction is attached as Exhibit 99.3 to this Current Report on Form 8-K and
is incorporated by reference into this Item.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
Exhibit Number Description of Exhibit
- -------------- ---------------------------
99.1 Press release issued August 1, 2006
99.2 Press release issued July 31, 2006
99.3 Press release issued August 2, 2006
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
Date: August 4, 2006 By: /s/ Stuart M. Essig
-----------------------------
Stuart M. Essig
President and Chief Executive Officer
Exhibit Index
Exhibit Number Description of Exhibit
- -------------- ---------------------------
99.1 Press release issued August 1, 2006
99.2 Press release issued July 31, 2006
99.3 Press release issued August 2, 2006
News Release
Contacts:
Integra LifeSciences Holdings Corporation
John B. Henneman, III Maria Platsis
Executive Vice President Vice President, Corporate Development
Chief Administrative Officer (609) 936-2333
(609) 936-2481 mplatsis@integra-ls.com
jhenneman@integra-ls.com
Integra LifeSciences Holdings Corporation Appoints
Neal Moszkowski to its Board of Directors
Plainsboro, NJ / August 1, 2006 / -- Integra LifeSciences Holdings Corporation
(Nasdaq: IART) today announced that effective immediately it has increased the
size of its Board of Directors to eight and appointed Neal Moszkowski to fill
the newly created vacancy. Mr. Moszkowski was also appointed to the Compensation
Committee.
Mr. Moszkowski currently serves as the Co-Chief Executive Officer of TowerBrook
Capital Partners, LP, a private equity investment company with more than $2.5
billion under management. The firm has offices in London and New York and
focuses on making investments in European and North American companies.
Richard Caruso, Chairman of Integra's Board of Directors stated: "I am pleased
that Neal has agreed to re-join our Board of Directors. Neal is a seasoned
senior executive with extensive financial and governance expertise. His broad
interests in healthcare and financial matters make him a great addition to the
Board."
"I look forward to working with Stuart Essig, the Board, and the entire team at
Integra. I am enthusiastic about this new position as a Director and look
forward to contributing to Integra's mission of becoming a leader in medical
devices used in neurosurgery, reconstructive surgery and general surgery. I
believe Integra is well positioned to continue its technological leadership,"
said Mr. Moszkowski.
Commenting on Mr. Moszkowski's appointment to the Board, Stuart Essig, Integra's
President and Chief Executive Officer stated: "Neal's management experience and
leadership skills in the healthcare industry are an excellent fit with Integra's
mission of bringing innovative medical technology to the market. I look forward
to Neal's future contributions to Integra's strategic development."
Prior to joining TowerBrook, Mr. Moszkowski was Managing Director and Co-Head of
Soros Private Equity, the private equity investment business of Soros Fund
Management LLC, where he served since August 1998. From August 1993 to August
1998, Mr. Moszkowski worked for Goldman, Sachs & Co. and affiliates, where he
served as Vice President and Executive Director in the Principal Investment
Area. He is also the Chairman of the Board of Directors of Wellcare Health
Plans, Inc., a health maintenance organization. He also serves on the Boards of
Directors of Bluefly, Inc., an online apparel retailer, Spheris, Inc, a provider
of medical transcription, and JetBlue Airways Corporation, a passenger airline.
Mr. Moszkowski earned his B.A. from Amherst College and his M.B.A. from the
Stanford Graduate School of Business.
Integra LifeSciences Holdings Corporation is a diversified medical technology
company that develops, manufactures, and markets medical devices for use in a
variety of applications. The primary applications for our products are
neurosurgery, reconstructive surgery and general surgery. Integra is a leader in
applying the principles of biotechnology to medical devices that improve
patients' quality of life. Our corporate headquarters are in Plainsboro, New
Jersey, and we have manufacturing and research facilities located throughout the
world. We have approximately 1,650 employees. Please visit our website at
(http://www.Integra-LS.com).
This news release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
include, but are not limited to, statements concerning expectations for future
financial results, including revenues, gross margins and earnings, development
of products and formation of strategic alliances. Such forward-looking
statements involve risks and uncertainties that could cause actual results to
differ materially from predicted or expected results. In addition, the economic,
competitive, governmental, technological and other factors identified under the
heading "Factors That May Affect Our Future Performance" included in the
Business section of Integra's Annual Report on Form 10-K for the year ended
December 31, 2005 and information contained in subsequent filings with the
Securities and Exchange Commission could affect actual results.
Source: Integra LifeSciences Holdings Corporation
News Release
Contacts:
Integra LifeSciences Holdings Corporation
Maureen B. Bellantoni Maria Platsis
Executive Vice President Vice President, Corporate Development
and Chief Financial Officer (609) 936-2333
(609) 936-6822 mplatsis@Integra-LS.com
maureen.bellantoni@Integra-LS.com
Integra LifeSciences Announces Amendment to Exchange Offer for its 2 1/2%
Contingent Convertible Subordinated Notes due 2008
Plainsboro, New Jersey, July 31, 2006 - Integra LifeSciences Holdings
Corporation (NASDAQ: IART) announced today that it has modified its offer to
exchange up to $120 million principal amount of new notes with a "net share
settlement" mechanism for its currently outstanding 2 1/2% Contingent
Convertible Subordinated Notes due 2008. Holders who exchange their old notes
will still receive new notes with the net share settlement feature and otherwise
substantially similar terms to the old notes plus an exchange fee of $2.50 per
$1,000 principal amount of their old notes validly tendered and accepted for
exchange. However, the method for calculating the consideration to be paid to
holders of the new notes upon the conversion of those notes has been modified to
reflect a daily calculation of the consideration payable upon conversion.
The exchange offer will expire at 5:00 p.m., New York City time, on August 14,
2006, unless extended or earlier terminated by Integra. Old notes must be
tendered on or prior to the expiration of the offer, and tendered old notes may
be withdrawn at any time on or prior to the expiration of the offer. Validly
withdrawn old notes will be returned to the holder in accordance with the terms
of the offer. Following the expiration of the offer and subject to the terms of
the offer, Integra will accept all old notes validly tendered and not validly
withdrawn prior to the expiration of the offer and will issue the new notes in
exchange promptly thereafter.
This press release is for informational purposes only and is not an offer to buy
or the solicitation of an offer to sell securities of Integra. The solicitation
of offers to exchange the outstanding 2 1/2% Contingent Convertible Subordinated
Notes is only being made pursuant to the exchange offer documents, including the
Offer to Exchange (as supplemented) and the related Letter of Transmittal that
Integra has distributed or will be distributing to its noteholders and filing
with the Securities and Exchange Commission. Noteholders and investors should
read carefully the Offer to Exchange and related materials when they are
available because they contain important information. Noteholders and investors
may obtain a free copy (when available) of the Offer to Exchange and other
documents that will be filed by Integra with the Securities and Exchange
Commission at the Security and Exchange Commission's website at www.sec.gov or
from the information agent, Georgeson Inc., at (212) 440-9800 (banks and
brokers) or (866) 482-4943 (all others). Noteholders are urged to carefully read
these materials before making any decision with respect to the exchange offer.
This announcement is neither an offer to sell nor a solicitation of an offer to
buy any securities and shall not constitute an offer, solicitation or sale in
any jurisdiction in which such offer, solicitation or sale is unlawful. The new
notes will not be registered under the Securities Act of 1933, as amended, or
any state securities laws, and unless so registered, may not be offered or sold
in the United States except pursuant to an exemption from the registration
requirements of the Securities Act of 1933, as amended and applicable state
laws.
Integra LifeSciences Holdings Corporation is a diversified medical technology
company that develops, manufactures, and markets medical devices for use in a
variety of applications. The primary applications for our products are
neurosurgery, reconstructive surgery and general surgery. Integra is a leader in
applying the principles of biotechnology to medical devices that improve
patients' quality of life. Our corporate headquarters are in Plainsboro, New
Jersey, and we have manufacturing and research facilities located throughout the
world. We have approximately 1,600 employees. Please visit our website at
(http://www.Integra-LS.com).
This news release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve risks and uncertainties that could cause actual results to
differ materially from predicted or expected results. Among other things,
Integra's ability to successfully complete the exchange offer on the above terms
could affect Integra's future financial results. In addition, the economic,
competitive, governmental, technological and other factors identified under the
heading "Factors That May Affect Our Future Performance" included in the
Business section of Integra's Annual Report on Form 10-K for the year ended
December 31, 2005 and information contained in subsequent filings with the
Securities and Exchange Commission could affect actual results.
Source: Integra LifeSciences Holdings Corporation
News Release
Contacts:
Integra LifeSciences Holdings Corporation
John B. Henneman, III Maria Platsis
Executive Vice President Vice President, Corporate Development
Chief Administrative Officer (609) 936-2333
(609) 936-2481 mplatsis@Integra-LS.com
jhenneman@Integra-LS.com
Integra LifeSciences Closes its Acquisition of
Kinetikos Medical, Inc.
Plainsboro, New Jersey / August 2, 2006 -- Integra LifeSciences Holdings
Corporation (NASDAQ: IART) announced today that it has acquired the shares of
Kinetikos Medical, Inc. ("KMI") for approximately $40 million in cash, subject
to certain adjustments, including future payments based on the performance of
the KMI business after the acquisition.
KMI, based in Carlsbad California, is a leading developer and manufacturer of
innovative orthopedic implants and surgical devices for small bone and joint
procedures involving the foot, ankle, hand, wrist and elbow. KMI generated
revenues of $11.4 million for the twelve months ended March 31, 2006.
"We are excited to add KMI's people and products to the Integra reconstructive
surgery team," said Stuart M. Essig, Integra's President and Chief Executive
Officer. "KMI is an ideal strategic fit with our growing extremity business and
strengthens our presence in the orthopedic hand market. This acquisition allows
us to leverage our current and future regenerative products for dermal, tendon
and nerve repair targeted for hand surgery. We expect to benefit from the
synergy between KMI's upper extremity orthopedic implant products and these
regenerative products, including the INTEGRA(R) Dermal Regeneration Template,
the INTEGRA(R) Bilayer and single-layer Matrix Wound Dressings, NeuraGen(TM) and
NeuraWrap(TM). In addition, KMI's product range in the foot and ankle market
holds strong brand identity and complements our rapidly growing Newdeal
business."
KMI has an experienced senior management team with a proven track record in the
orthopedics device industry, which has now joined Integra.
KMI currently markets products that address both the trauma and reconstructive
segments of the extremities market. KMI's reconstructive products are largely
focused on treating deformities and arthritis in small joints of the upper and
lower extremity, while its trauma products are focused on the treatment of
fractures of small bones most commonly found in the extremities.
KMI's products include the UNI2, which is recognized as the premier implant for
wrist replacement, a procedure that restores the function of the arthritic
wrist. The Subtalar Maxwell-Brancheau Arthroereisis System ("MBA"), another of
KMI's products, is the market leading product that provides a simple and
effective means of correcting debilitating flatfoot for both pediatric and adult
patients. KMI currently sells its products through approximately 45 independent
sales agencies in the United States and through 17 independent distributors
internationally. Approximately 89% of KMI's sales are generated in the United
States. Integra looks forward to expanding the sale of KMI products
internationally through its well-established Newdeal infrastructure.
"We are very excited to join the Integra LifeSciences family of companies," said
Jim Ham, General Manager of KMI. "We look forward to expanding our business
within Integra. In particular, we believe the combination of Integra's portfolio
of collagen tissue-engineered products and KMI's upper extremity orthopedic
implants creates an opportunity for revenue synergy. We and the management of
Integra will work together to integrate KMI into Integra so that the combined
business can maximize these revenue synergies. Together we can offer a broad
package of solutions for the orthopedic hand, foot and ankle, reconstructive and
podiatric surgeons."
First Albany Capital served as advisor to KMI for the transaction.
Integra LifeSciences Holdings Corporation is a diversified medical technology
company that develops, manufactures, and markets medical devices for use in a
variety of applications. The primary applications for our products are
neurosurgery, reconstructive surgery and general surgery. Integra is a leader in
applying the principles of biotechnology to medical devices that improve
patients' quality of life. Our corporate headquarters are in Plainsboro, New
Jersey, and we have manufacturing and research facilities located throughout the
world. We have approximately 1,650 employees. Please visit our website at
(http://www.Integra-LS.com).
This news release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
include, but are not limited to, statements concerning expectations for this
newly acquired business and the expected impact of this acquisition on Integra's
future financial results. Such forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from
predicted or expected results. Among other things, Integra's ability to
successfully integrate KMI into its operations could affect the impact of this
acquisition on Integra's future financial results. In addition, the economic,
competitive, governmental, technological and other factors identified under the
heading "Factors That May Affect Our Future Performance" included in the
Business section of Integra's Annual Report on Form 10-K for the year ended
December 31, 2005 and information contained in subsequent filings with the
Securities and Exchange Commission could affect actual results.
Source: Integra LifeSciences Holdings Corporation