Morrisville-based TransEnterix has not only completed its merger with SafeStitch Medical but also raised $30 million in new financing.

TransEnterix and SafeStitch (OTCBB: SFES), which is based in Florida, announced the closure of the deal early Wednesday.

The combined company will be based in the Triangle and continue to trade under the SafeStich symbol until a change is approved sometime in the fourth quarter.

SafeStitch shares closed at $1.52 on Tuesday.

The combined company is expected to be called TransEnterix and will be led by Todd Pope, the chief executive officer of TransEnterix. TransEnterix shareholders will own 65 percent of the company.

“We believe the business combination with SafeStitch will enhance our ability to bring flexible minimally invasive surgical technologies to market,” Pope said in a statement. “This accompanying fundraising provides the company with the resources to advance the development of SurgiBot, a novel patient side minimally invasive surgical robotic system.” 

Pope also will serve on the newly formed board of directors.

SafeStitch raised $30.2 million in a private placement of its equity securities as part of the deal. TransEnterix investors provided $19.7 million of the financing. Dr. Phillip Frost and Dr. Jane Hsiao of SafeStich and other SafeStich investors contributed $10.5 million.

The company also named its new combined board:

Paul LaViolette, a Partner at SV Life Sciences and Chairman of TransEnterix, as chairman

Directors:

  • Todd Pope
  • Dr. Jane Hsiao, the former Chairperson of SafeStitch Medical
  • Dr. Phillip Frost, Chief Executive Officer and Chairman of OPKO Health and Chairman of Teva Pharmaceutical Industries
  • Dr. Aftab R. Kherani, Principal of Aisling Capital
  • David B. Milne, Managing Partner at SV Life Sciences
  • Dennis J. Dougherty, Managing General Partner of Intersouth Partners
  • Richard C. Pfenniger, former Chief Executive Officer of Continucare Corporation and a member of the SafeStitch Board pre-merger
  • William N. Starling, Managing Director of Synergy Life Science Partners, LP.

The announcement as issued Wednesday morning:

SAFESTITCH MEDICAL COMPLETES MERGER WITH TRANSENTERIX

  • $30 Million Financing Raised from Existing TransEnterix and SafeStitch Medical Stockholders
  • Combined Company to be Renamed TransEnterix

MIAMI & RESEARCH TRIANGLE, N.C.- (BUSINESS WIRE) – SafeStitch Medical, Inc. (OTCBB: SFES) and TransEnterix, Inc., a privately-held company, today announced that they have closed SafeStitch’s previously announced acquisition of TransEnterix. The combined company is expected to be renamed TransEnterix, subject to stockholder approval, and headquartered in the Research Triangle, NC. The company will continue to trade under the name SafeStitch Medical, Inc. on the OTCBB under the symbol SFES until the anticipated name change is approved by stockholders, which is expected to occur in the fourth quarter of 2013.

Todd M. Pope, the Chief Executive Officer of TransEnterix, will serve as the Chief Executive Officer and a Director of the combined company. Paul A. LaViolette, a Partner at SV Life Sciences and Chairman of TransEnterix, will serve as the Chairman of the combined company’s Board of Directors. Dr. Jane Hsiao, the former Chairperson of SafeStitch Medical will continue to serve as a Director of the combined company, and Dr. Phillip Frost, Chief Executive Officer and Chairman of OPKO Health and Chairman of Teva Pharmaceutical Industries has joined as a Director. The remaining Directors are Dr. Aftab R. Kherani, Principal of Aisling Capital; David B. Milne, Managing Partner at SV Life Sciences; Dennis J. Dougherty, Managing General Partner of Intersouth Partners; Richard C. Pfenniger, former Chief Executive Officer of Continucare Corporation and a member of the SafeStitch Board pre-merger; and William N. Starling, Managing Director of Synergy Life Science Partners, LP.

Mr. Pope commented, “We believe the business combination with SafeStitch will enhance our ability to bring flexible minimally invasive surgical technologies to market. This accompanying fundraising provides the company with the resources to advance the development of SurgiBot™, a novel patient side minimally invasive surgical robotic system.”

Merger Transaction and Financing

Under the terms of the merger agreement with TransEnterix, SafeStitch Medical issued approximately 105.5 million shares of its common stock to stockholders of TransEnterix, has reserved approximately 17.0 million shares for exercise of TransEnterix options and warrants, and paid an aggregate of approximately $350,000 in cash to TransEnterix’s former stockholders whose TransEnterix shares did not convert to SafeStitch shares.

Perella Weinberg Partners acted as exclusive financial advisor and Wilson Sonsini Goodrich & Rosati acted as legal counsel to TransEnterix. Greenberg Traurig, P.A. acted as legal counsel to SafeStitch Medical.

Concurrent with the closing of the merger, SafeStitch raised $30.2 million, before offering expenses, in a private placement of its equity securities. Existing TransEnterix investors contributed $19.7 million and Dr. Phillip Frost and Dr. Jane Hsiao, either personally or through affiliated entities, along with other existing SafeStitch investors, contributed an additional $10.5 million in the financing.is going public – but not on its own.