TPG's 2018 acquisition of Exactech

analysisAccording to the merger proxy, TPG's approach began on 1 May 2017, when Daniel Hann and Jeffrey Binder, a former Biomet chief executive and TPG adviser, met William Petty, David Petty and Bruce Thompson in Gainesville, and Exactech said it was not exploring a sale. Meetings followed with Todd Sisitsky of TPG Capital in June and with Kendall Garrison in July. The lead independent director, James G. Binch, contacted TPG about a confidentiality and standstill agreement; a confidentiality agreement with TPG Global was dated 7 August 2017, and TPG's advisers met Exactech staff in Gainesville at the end of August. ¹

analysisOn 22 October 2017 Exactech agreed to merge with Osteon Merger Sub, Inc., wholly owned by Osteon Holdings, L.P. ('Parent'), both described as affiliates of TPG Capital and jointly owned by the fund TPG Partners VII, L.P., which committed up to $737,057,000 of equity. An amendment of 3 December raised the price from $42.00 to $49.25 a share, a premium of about 53.9% to the price before the announcement; J.P. Morgan gave a fairness opinion and the antitrust waiting period ended early on 17 November. The deal was approved by the directors who were not employees, with the Pettys recused as rollover investors; the independent directors were to receive up to $1.2 million for their work on the sale and up to $600,000 of severance. ¹

analysisAt the record date William Petty beneficially owned 24.3% of the shares, mostly through Prima Investments, Limited Partnership, owned by him, Betty Petty and their children, while GAMCO, BlackRock and Dimensional Fund Advisors each held more than 5%. Under a Rollover and Voting Agreement the three Pettys, Prima, Miller Family Holdings and five managers exchanged 2,711,584 Exactech shares for shares of Parent just before the merger — Prima alone 2,300,000 shares for 130,757,376 Class B shares — agreed to vote for the deal and to vote in line with the TPG fund on director nominations, mergers and recapitalisations. The proxy valued William Petty's shares at about $160 million at the merger price. ¹

analysisShareholders approved the merger on 13 February 2018, and on 14 February Osteon Merger Sub merged into Exactech; William Petty signed for Exactech and Michael LaGatta for the merger subsidiary and for the TPG fund through its general-partner chain. Exactech announced that TPG had acquired all its stock in a transaction valued at about $737 million and left Nasdaq. The final filings identified the new parent as Osteon Holdings, Inc., a Delaware corporation at TPG's Fort Worth office, whose Form D listed Garrison, Sisitsky, John Schilling, Binder and the two Pettys as directors. ^{1 2 3 4}

analysisTwo federal class actions filed in December 2017 in the Northern District of Florida accused Exactech, its directors, Parent, the merger subsidiary and TPG Capital of violating the disclosure provisions of the Securities Exchange Act. In Florida state court The Arbitrage Fund sued the Pettys, their partnership and the outside directors for breach of fiduciary duty, alleging that the Pettys had declined a rival bidder's $54-a-share proposal and negotiated undisclosed terms with TPG; in July 2020 the appeal court reversed the denial of class certification and sent the case back to the trial court. ^{1 2}

qualification

The complaints' allegations were not adjudicated in the record. The account of the competing bid and the negotiations is the plaintiff's, as summarised by the appeal court on the class-certification question; the court did not decide the merits.

response

Exactech and the director defendants denied the allegations and said they intended to defend the actions vigorously.

outcome

The outcome of the two federal actions is not in the record; the merger closed on 14 February 2018.

analysisThe Settlement Trust's 2026 complaint gives a different account. It says TPG's first contact came on 4 April 2017 through Hann, that TPG first offered $39.00 a share in September 2017 and paid Binder a $1 million success fee, that William Petty received more than $46 million and David Petty more than $2.8 million, and that TPG's due diligence saw the FDA's 2017 inspection findings and a product-defect suit but did not visit the packaging supplier. It also alleges that the deal left Exactech with more than $200 million of secured debt and probably insolvent from the closing. ¹

qualification

These are allegations in the Settlement Trust's complaint, which was pending in the Delaware Court of Chancery in October 2026; no court has ruled on them. The deposition, invoice and inspection documents are under seal or were not retrieved.