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BUSINESS COMBINATION
6 Months Ended
Jun. 30, 2022
Business Combination and Asset Acquisition [Abstract]  
BUSINESS COMBINATION BUSINESS COMBINATION
MD Orthopaedics

On April 1, 2022, OrthoPediatrics Iowa Holdco, Inc., a newly-formed, wholly-owned subsidiary of the Company, merged with and into MD Orthopaedics, Inc., an Iowa corporation (“MD Ortho”). MD Ortho has developed and manufactures a portfolio of orthopedic clubfoot products. The acquisition expands our total addressable market, serving as a specialty bracing platform company within our Trauma and Deformity business.

Under the terms of the related merger agreement, the Company paid to the indirect, sole shareholder of MD Ortho consideration of (a) $8,781 in cash, after adjusting for closing net working capital, and (b) 173,241 shares of unregistered common stock, $0.00025 par value per share, of the Company, representing approximately $9,707 (based on the April 1, 2022 closing share price of $56.03). The
Company incurred approximately $381 of acquisition-related costs, that are included in general and administrative expenses on the consolidated statement of operations for the six months ended June 30, 2022.

The following table summarizes the total consideration paid for MD Ortho and the preliminary allocation of purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date:

Fair value of estimated total acquisition consideration$18,487 
Assets
Cash and cash equivalents420 
Accounts receivable-trade1,062 
Inventories1,126 
Prepaid expenses and other current assets100 
Property and equipment2,444 
Amortizable Intangible assets9,120 
Other intangible assets2,410 
Total assets16,682 
Liabilities
Accounts payable and accrued liabilities45 
Other current liabilities586 
Deferred Tax Liability2,721 
Total liabilities3,352 
Less: total net assets13,330 
Goodwill$5,157 

The fair value of identifiable intangible assets were based on preliminary valuations using a combination of the income and cost approach, inputs which would be considered Level 3 under the fair value hierarchy. The estimated fair value and useful life of identifiable intangible assets are as follows:

AmountRemaining Economic Useful Life
Trademarks / Names$2,410 Indefinite
Patents2,660 10 years
Customer Relationships6,460 15 years
$11,530 

The fair value estimates and purchase price allocation included above are preliminary while the Company finalizes fair value estimates of the acquired intangible assets and related tax considerations.


The following table represents the pro forma net revenue and net loss assuming the acquisition occurred on January 1, 2021.
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Net revenue$32,928 $29,471 $58,814 $53,308 
Net loss$(333)$(3,336)$(9,024)$(12,897)