Asensus Surgical Announces Signing of Definitive Merger Agreement with KARL STORZ

Rhea-AI Summary

Asensus Surgical announced a definitive merger agreement with KARL STORZ Endoscopy-America, a subsidiary of KARL STORZ SE & Co. KG. KARL STORZ will acquire Asensus for $0.35 per share in cash, representing a 67% premium over the April 2, 2024 closing price. The transaction has been unanimously approved by Asensus’ Board of Directors and is expected to close in Q3 2024, pending stockholder approval and customary conditions. Post-merger, Asensus will become a subsidiary of KARL STORZ and will delist from the NYSE American Exchange.

This merger aims to enhance KARL STORZ’s portfolio in the surgical robotics market, leveraging Asensus’ innovative technology. Financial and legal advisors for the deal include Jefferies and Ballard Spahr LLP for Asensus, and UBS Investment Bank and Ropes & Gray LLP for KARL STORZ.

Positive

• KARL STORZ to acquire Asensus at $0.35 per share, a 67% premium over April 2, 2024 closing price.
• Merger unanimously approved by Asensus’ Board of Directors, indicating strong internal support.
• Post-merger, Asensus will become a subsidiary of KARL STORZ, providing potential stability and resources.
• Transaction expected to close in Q3 2024, providing a clear timeline for investors.
• Merger enhances KARL STORZ’s portfolio in the growing surgical robotics market.
• Asensus' innovative technology and intellectual property recognized and valued in the merger.
• Jefferies and UBS Investment Bank involved as financial advisors, indicating strong financial oversight.

Negative

• Asensus shareholders will no longer hold publicly traded shares post-merger.
• Acquisition price of $0.35 per share may be viewed as undervaluing the company by some investors.
• Pending stockholder approval and other customary closing conditions could delay or jeopardize the merger.
• Post-merger delisting from NYSE American Exchange could limit liquidity for current shareholders.

Insights

Financial Analyst

The acquisition of Asensus Surgical by KARL STORZ for $0.35 per share, representing a premium of 67% over the prior closing price, indicates a strong validation of Asensus’ technology and potential. From a financial perspective, this premium suggests that KARL STORZ sees significant inherent value in Asensus’ intellectual property and technological innovations. This could be a lucrative opportunity for Asensus’ shareholders, as the offer price is almost double the recent trading prices, providing an immediate and tangible return on investment. Furthermore, the merger could bolster KARL STORZ's position in the competitive and rapidly growing surgical robotics market, which is expected to expand significantly over the coming years. For investors, the key takeaway is the immediate liquidity at a considerably higher share price, albeit at the expense of future potential growth if Asensus had continued independently.

Market Research Analyst

From a market perspective, this merger creates a notable shift within the surgical robotics industry. KARL STORZ’s acquisition of Asensus not only consolidates its market position but also allows it to leverage Asensus’ existing technological advancements and intellectual property, particularly the next-generation LUNA system. This could position KARL STORZ as a formidable player against other established entities like Intuitive Surgical. Moreover, the merger is likely to lead to enhanced innovation and product offerings under the combined entity, which could significantly benefit both surgeons and patients by providing more advanced and reliable surgical solutions. The strategic fit and technological complementarity between KARL STORZ and Asensus are expected to drive future growth and market share gains in the global medical technology field.

Legal Expert

The transaction’s completion is contingent upon customary closing conditions, including stockholder approval and regulatory clearances. Given the unanimous approval by Asensus' Board of Directors, the likelihood of securing shareholder approval seems high. However, the legal intricacies surrounding mergers and acquisitions should not be underestimated. It's important to monitor potential regulatory hurdles or unforeseen legal challenges that might arise during the process. Additionally, once the merger is finalized, Asensus will no longer be publicly listed, thus eliminating the public trading of its stock. Shareholders should prepare for the transition and understand the implications of owning stock in a privately held subsidiary of KARL STORZ.

KARL STORZ to acquire Asensus for $0.35 per share in cash

Creating a leading surgical robotics division within KARL STORZ

RESEARCH TRIANGLE PARK, N.C., June 07, 2024 (GLOBE NEWSWIRE) -- Asensus Surgical, Inc. (NYSE American: ASXC) (“Asensus Surgical” or “Asensus”), a global leader of innovative digital solutions for the operating room, today announced that it has entered into a definitive merger agreement (the “Merger Agreement”) with KARL STORZ Endoscopy-America, Inc. ("KARL STORZ"), a wholly owned direct subsidiary of KARL STORZ SE & Co. KG, an independent, family-owned global medical technology company. Under the Merger Agreement, KARL STORZ will acquire all of the outstanding shares of Asensus Surgical for $0.35 per share in cash (the “Merger”). The purchase price represents a premium of approximately 67% based on the per share closing price of the Asensus common stock on the NYSE American on April 2, 2024 (the date prior to announcement of a potential transaction), and a premium of approximately 52% to the closing price of the common stock on the last trading day prior to the date of this announcement. The transaction has been unanimously approved by Asensus’ Board of Directors.

"We are pleased to have reached this agreement with KARL STORZ, which we believe maximizes value for our stockholders,” said Anthony Fernando, Asensus Surgical President and CEO. “This transaction is a testament to the value of our innovative robotic and digital technology, intellectual property, and the hard work of our talented team. We are excited to enter the next chapter for Asensus with KARL STORZ, which will allow us to continue to develop and deliver precise, safer, predictable surgery and digital tools to patients and surgeons around the world."

The transaction would enhance KARL STORZ’s portfolio and market presence, strengthening KARL STORZ’s position in the growing robotic surgical market, particularly with the development of the next generation LUNA system.

Asensus Surgical will work expeditiously to secure stockholder approval of the transaction and to close the transaction in accordance with the terms of the Merger Agreement. The transaction is anticipated to close during the third quarter of 2024, subject to customary closing conditions, including receipt of approval from the Asensus stockholders. Upon completion of the transaction, Asensus Surgical will become a subsidiary of KARL STORZ Endoscopy-America and will no longer be publicly listed or traded on the NYSE American Exchange.

Jefferies LLC served as financial advisor to Asensus Surgical, and Ballard Spahr LLP served as legal counsel to Asensus Surgical. UBS Investment Bank served as financial advisor to KARL STORZ, and Ropes & Gray LLP served as legal counsel to KARL STORZ.

About Asensus Surgical, Inc.

Asensus Surgical is revolutionizing surgery with the first intra-operative Augmented Intelligence technology approved for use in operating rooms around the world. Recognized as an award-winning leader in digital technology, Asensus is committed to making surgery more accessible and predictable while delivering consistently superior outcomes. Asensus’ novel approach to digitizing laparoscopy has led to system placements globally. Led by engineers, medical professionals, and industry luminaries, Asensus is powered by human ingenuity and driven by collaboration. To learn more about the Senhance® Surgical System and the new LUNA™ System in development, visit www.asensus.com.

About KARL STORZ

The medical technology company KARL STORZ was founded in 1945 in Tuttlingen, Germany, and is an international leader in the world of endoscopy. Now in its third generation, the family-owned company employs 9,400 people in more than 40 countries worldwide. The company portfolio includes 13,000 products for human and veterinary medicine. KARL STORZ stands for visionary design, precision craftsmanship and clinical effectiveness. Preliminary sales in the 2023 financial year amounted to 2.17 billion euros. Production sites are located in Germany, the USA, Switzerland and Estonia. KARL STORZ Endoscopy-America is a subsidiary of KARL STORZ SE & Co. KG.

Caution Regarding Forward Looking Statements

This communication includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include statements concerning anticipated future events and expectations that are not historical facts. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Actual results may vary materially from those expressed or implied by the forward-looking statements herein due to risks and uncertainties. These risks and uncertainties include, but are not limited to, those associated with: (i) the parties’ ability to meet expectations regarding the timing and completion of the Merger; (ii) the occurrence of any event, change or other circumstance that would give rise to the termination of the Merger Agreement; (iii) the fact that Asensus’ stockholders may not approve the Merger Agreement and the Merger; (iv) the fact that certain terminations of the Merger Agreement require Asensus to pay a termination fee of $3,600,000; (v) the failure to satisfy each of the conditions to the consummation of the Merger; (vi) the disruption of management’s attention from ongoing business operations due to the Merger; (vii) the effect of the announcement of the Merger on Asensus’ relationships with its customers, as well as its operating results and business generally; (viii) the outcome of any legal proceedings related to the Merger; (ix) retention of employees of Asensus following the announcement of the Merger; (x) the fact that Asensus’ stock price may decline significantly if the Merger is not completed; (xi) the fact that Asensus may be obligated to repay amounts advanced under that certain Secured Promissory Note, dated April 3, 2024, by and between Asensus and KARL STORZ SE & Co. KG under the circumstances described therein and whether the Company will be able to repay the Note if the Merger is not completed, and other factors described under the heading “Risk Factors” in Asensus’ Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as amended, and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, as each may be updated or supplemented by subsequent reports that Asensus has filed or files with the SEC. The forward-looking statements speak only as of the date such statements are made. Asensus is under no obligation to, and expressly disclaims any obligation to, update or alter any forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise, except as required by law.

Important Additional Information and Where to Find It

In connection with the Merger, Asensus will be filing preliminary and definitive proxy statements and other relevant documents relating to the proposed transaction with the Securities and Exchange Commission (the “SEC”). This communication is not a substitute for the proxy statement or any other document that Asensus may file with the SEC or send to its stockholders in connection with the Merger. Before making any voting decision, Asensus’ stockholders are urged to read all relevant documents filed with the SEC, including the proxy statement, when they become available because they will contain important information about the Merger. Investors and security holders will be able to obtain the proxy statement and other documents filed by Asensus with the SEC (when available) free of charge at the SEC’s website, www.sec.gov, or from Asensus at the investor relations page of its website, www.asensus.com, Investors. These documents are not currently available.

No Offer or Solicitation

This communication is for information purposes only and is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.

Participants in the Solicitation

Asensus and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the holders of Asensus’ common stock in respect of the Merger. Information about Asensus’ directors and executive officers is set forth in Asensus’ Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 21, 2024, as amended by the Form 10-K/A filed with the SEC on April 29, 2024. The names of participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant documents to be filed by Asensus with the SEC in respect of the proposed transaction.

ASENSUS SURGICAL CONTACT:

INVESTORS
Mark Klausner or Mike Vallie
ICR Westwicke
invest@asensus.com
443-213-0499

MEDIA
Dan Ventresca
Matter Communications
AsensusPR@matternow.com
617-874-5488

FAQ

What is the acquisition price for Asensus Surgical by KARL STORZ?

The acquisition price is $0.35 per share in cash.

When is the Asensus and KARL STORZ merger expected to close?

The merger is expected to close during the third quarter of 2024.

How much of a premium does the $0.35 per share acquisition price represent?

The $0.35 per share price represents a 67% premium over the April 2, 2024 closing price.

Will Asensus Surgical remain publicly traded after the merger?

No, Asensus Surgical will no longer be publicly listed or traded on the NYSE American Exchange post-merger.

What will happen to Asensus Surgical after the merger with KARL STORZ?

Asensus Surgical will become a subsidiary of KARL STORZ Endoscopy-America.

Who are the financial advisors for the Asensus and KARL STORZ merger?

Jefferies served as financial advisor to Asensus, while UBS Investment Bank served as financial advisor to KARL STORZ.

What is the main benefit of the merger for KARL STORZ?

The merger enhances KARL STORZ’s portfolio in the growing surgical robotics market.