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DJO to Be Sold for $1.6B

DJO Inc., a Vista-based maker of orthopedic devices, said July 16 that it agreed to be acquired by ReAble Therapeutics Inc., a Texas company, in a cash transaction valued at $1.6 billion, including the debt of DJO.

The agreement provides a cash payment of $50.25 for each share of DJO stock, a premium of 25 percent over the average trading price of the past 30 days ended July 13, according to a press announcement.

Traded on the New York Stock Exchange, DJO was $35 a year ago, then went to $45 late last year, but went into a slide, hitting just above $31 in May. It closed at $42.10 on July 13. In midday trading July 16, the stock was at $50.07, an increase of 19 percent over the prior session’s closing price.

The Blackstone Group, a private equity group that recently went public, is the controlling shareholder of Austin-based ReAble and is providing the financing for the transaction.

ReAble makes complementary orthopedic rehabilitation and pain management products, and the combination of the two entities is expected to bring improved value to customers, the companies said.

The deal is expected to close in the fourth quarter, and requires the approval of DJO’s shareholders and regulators. Under the agreement, DJO may solicit other proposals for its sale from other bidders in the next 50 days, but if another agreement is arranged, it will have to pay ReAble a breakup fee of $18.7 million.

As of the first quarter, DJO reported net income of $4 million on revenue of $114.9 million, with sales up 39 percent. The company said then it was on track to generate 2007 revenue between $470 million and $480 million.

DJO has 3,000 employees, including 550 at its Vista headquarters.

, Mike Allen

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