DJO Global (DJO), San Diego, California, has announced that one of its indirect subsidiaries has signed a definitive agreement to purchase Rikco International D/B/A Dr. Comfort (Dr. Comfort or DRC), Mequon, Wisconsin, for approximately $254.6 million in cash. The transaction is expected to close within 30-45 days, subject to customary governmental approvals and closing conditions.
For the year ended December 31, 2010, DRC generated net sales of $71.8 million, reflecting growth of 22.5 percent over net sales of $58.6 million for the year ended December 31, 2009, according to a DJO press release.
In connection with entering into the definitive purchase agreement, DJO said its subsidiary, DJO Finance (DJOFL), entered into a debt commitment letter with Credit Suisse AG and Credit Suisse Securities (USA), pursuant to which, subject to the conditions set forth therein, they committed to provide DJOFL with up to $260 million of senior unsecured financing for the purpose of financing the acquisition and paying fees and expenses incurred in connection with the acquisition and the financing thereof. On a pro forma basis, considering the acquisition and related financing, DJO said it does not expect any material change in its ratio of total debt to pro forma consolidated adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
“Dr. Comfort has expanded the diabetic footwear market by providing the medical community with a broad assortment of high-quality and attractive prescription-based footwear styles in a market that has traditionally been served by unattractive and clinical-looking footwear products,” DJO president and CEO, Les Cross, said. “With innovative thinking and sales channel expertise, Dr. Comfort has driven provider and patient awareness of medically necessary diabetic footwear as an important modality that can prevent more serious diabetic complications such as foot ulcers. As a result, DRC has achieved very strong growth and the market leading position in diabetic footwear in the eight years it has been in business.
“On behalf of DJO, we look forward to Eric Lorenz, president of Dr. Comfort, his management team, and the Dr. Comfort employee teams joining DJO Global. We look forward to our future growth opportunities together,” Cross added.