OrthoLogic sells CPM business to OrthoRehab

OrthoLogic, a US company listed on the Nasdaq which specializes inorthopedic devices designed to promote the healing of musculoskeletal tissue, says that it has completed the sale of its continuous passive motion business to OrthoRehab for $12 million in cash. The latter firm will also assume approximately $2 million in liabilities.

Under the terms of the deal, OrthoLogic may earn up to an additional $2.5 million in cash, payable in August 2002, depending upon OrthoRehab's success in accomplishing certain unspecified objectives. The former will also retain $10 million in billed accounts receivable related to the CPM business, and will record a one-time loss on the sale of approximately $7 million in the second quarter ended June 30, 2001. Additionally, it will take a one-time charge of around $7 million related to costs associated with the final divestiture of the business.

Thomas Trotter, OrthoLogic's chief executive, added that the firm is selling the CPM business in order to concentrate on its bone-stimulation operations and its Chrysalin program, based around a new tissue-repair synthetic peptide developed from the human enzyme thrombin.