EATONTOWN, N.J., Aug. 29 /PRNewswire-FirstCall/ -- Osteotech, Inc.
(Nasdaq: OSTE) announced today that its Board of Directors has unanimously
determined that an unsolicited proposal by the Musculoskeletal Transplant
Foundation (MTF), a 501(C)(3) non-profit charity, to acquire all of the
outstanding stock of Osteotech, Inc. is inadequate and not in the best
interests of Osteotech's shareholders. The Board determined that the
financial consideration proposed by MTF significantly undervalues Osteotech
and its future growth prospects as an independent publicly traded company.
After receiving MTF's proposal, Osteotech and its financial advisor, Bear
Stearns, met with MTF and its financial advisor to review MTF's proposal.
Following this meeting, Osteotech's Board of Directors, which consists of six
independent directors out of a total of nine directors, held two lengthy
meetings to review MTF's proposal and to review management's strategic,
operational and financial plan for Osteotech. Based upon these meetings, and
in consultation with management, Bear Stearns and the Company's legal counsel,
the Osteotech Board of Directors concluded that the MTF proposal was
inadequate and not in the best interests of the Company and its shareholders,
and it advised MTF of this position. Osteotech offered to meet with MTF and
its financial advisors to discuss the Company's strategic plans and growth
initiatives, as well as the Company's views regarding valuation, but MTF
declined to attend this meeting.
Donald D. Johnston, Osteotech's independent Chairman of the Board, said,
"The Board of Directors unanimously determined that the MTF proposal
significantly undervalues the Company and its growth prospects and prematurely
eliminates the long-term value potential for Osteotech shareholders, as the
Company continues to build on the early success of its turnaround strategy.
Taking everything into consideration, the Board unanimously agrees that the
MTF proposal severely shortchanges shareholders and is nothing more than an
attempt by a significant competitor of the Company to buy Osteotech at an
extremely low valuation. We regret that MTF's management team has declined to
meet with Osteotech to review our strategic plan and growth initiatives and to
discuss our views on the valuation of Osteotech, despite our offer to do so."
Richard Bauer, Osteotech's Chief Executive Officer, stated, "With record
revenues of $25.3 million in the most recent quarter and a well established
strategic plan in place to return the Company to profitability in 2006,
Osteotech is generating significant financial progress. With our second
quarter core Grafton(R) DBM product revenues rising 27 percent domestically
and 33 percent internationally year-over-year, the traction we are gaining in
the global market is clear. Our recent progress reflects the renewed growth
in our domestic business and the exceptional growth we are experiencing within
our international business. To help ensure that we can deliver innovative
life enhancing products to surgeons and patients worldwide, as well as
accommodate future growth, we are taking definitive steps to diversify and
strengthen our global donor sources. As part of this strategy, we have
anticipated for some time that Osteotech and MTF would not have a business
relationship beginning in 2009, so we are executing a plan to have sufficient
donor supply without reliance on MTF at the conclusion of our 2002 contract on
December 31, 2008, as well as at the conclusion of our 2004 contract, which
runs through December 31, 2006 and which automatically renews under certain
circumstances through December 31, 2008. These accomplishments establish what
we believe are just the beginning of the financial and operational success
that our strategy is designed to deliver for Osteotech and its shareholders."
Mr. Bauer continued, "With adequate capital on hand to fund our business
model through to projected profitability in 2006 and beyond and minimal long-
term debt, the Company has a solid balance sheet upon which to finance rising
domestic and international sales. With a strong pipeline of innovative new
products and technologies, we remain extremely optimistic about the future of
Osteotech as an independent company. Osteotech's Board of Directors is
committed to maximizing shareholder value and will not allow Osteotech to be
sold out from under its shareholders just at the point when its growth
prospects are coming into clear focus," concluded Mr. Bauer.
Bear Stearns & Co. is serving as financial advisor to Osteotech, and
Heller Ehrman LLP and Richards, Layton & Finger, P.A. are serving as legal
counsel.
Certain statements made throughout this press release that are not
historical facts contain forward-looking statements (as such are defined in
the Private Securities Litigation Reform Act of 1995) regarding the Company's
future plans, objectives and expected performance. Any such forward-looking
statements are based on assumptions that the Company believes are reasonable,
but are subject to a wide range of risks and uncertainties and, therefore,
there can be no assurance that actual results may not differ materially from
those expressed or implied by such forward-looking statements. Factors that
could cause actual results to differ materially include, but are not limited
to, differences in anticipated and actual product and service introduction
dates, the ultimate success of those products in the marketplace, the
continued acceptance and growth of current products and services, the impact
of competitive products and services, the availability of sufficient
quantities of suitable donated tissue and the success of cost control and
margin improvement efforts. Certain of these factors are detailed from time
to time in the Company's periodic reports (including the Annual Report on Form
10-K for the year ended December 31, 2004 and the Form 10-Q for each of the
first two quarters of 2005) filed with the Securities and Exchange Commission.
All information in this press release is as of August 29, 2005 and the Company
undertakes no duty to update this information.
Osteotech, Inc., headquartered in Eatontown, New Jersey, is a leading
provider of human bone and bone connective tissue for transplantation and an
innovator in the development and marketing of biomaterial and implant products
for musculoskeletal surgery. For further information regarding Osteotech or
this press release, please go to Osteotech's website homepage at
http://www.osteotech.com and to Osteotech's Financial Information Request Form
website page at http://www.osteotech.com/finrequest.htm.
SOURCE Osteotech, Inc.
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Related links:
http://www.osteotech.com
Company News On-Call:
http://www.prnewswire.com/comp/668050.html
CONTACT:
Michael J. Jeffries, Osteotech,
+1-732-542-2800, or Richard J. Wolff, The Global Consulting
Group, +1-646-284-9400
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