MiMedx Group (NASDAQ:MDXG) said it has agreed to acquire Sanara MedTech in a transaction valued at $35 per Sanara share, a deal the company expects to close by the end of 2026. The announcement accompanied MiMedx’s second-quarter results, which showed sequential improvement in its wound-care business and continued growth in surgical sales.
Chief Executive Officer Joe Capper said the acquisition would shift the company’s revenue mix more heavily toward surgery. Following the closing, MiMedx expects about 75% of revenue to come from surgical products and 25% from wound care.
Sanara acquisition expands surgical portfolio
Capper said Sanara contributes more than $100 million in revenue, all from surgical procedures, and brings products that are complementary to MiMedx’s existing portfolio. The company said Sanara’s offerings would add approximately $4 billion in new addressable market opportunity.
Sanara’s largest product line is CellerateRX, a bovine particulate product used in the management of surgical, traumatic, and partial- and full-thickness wounds, as well as first- and second-degree burns. Capper said the product generated about $80 million of trailing-12-month revenue, is supported by more than 20 published clinical studies, and has been approved or contracted in more than 4,000 hospitals.
The acquired portfolio also includes BIASURGE, a no-rinse irrigation solution used for mechanical cleansing and removal of debris from surgical wounds. Capper said MiMedx sees opportunities to expand distribution of that product, including potential use in wound-care centers.
Sanara is also developing OsStic, a synthetic injectable bone bioadhesive that has received FDA breakthrough device designation. The company is pursuing an initial indication for periarticular fractures and hopes to have the product approved and in the market during the first quarter of 2027, according to Capper.
MiMedx said it expects the combined company to generate revenue “well in excess of” $400 million in 2027, assuming the transaction closes this year. Management also expects double-digit revenue growth, at least $20 million in annualized cost synergies and adjusted EBITDA margin of at least 20% in 2027.
Chief Financial Officer Doug Rice said more than half of the expected synergies are expected to come from general and administrative expense, with the remainder spread across other areas. Management characterized the acquisition as immediately accretive even before synergies.
Financing and balance sheet
MiMedx secured committed financing for the transaction through a $300 million term loan from Hayfin Capital Management. Rice said the six-year loan will carry interest at SOFR plus 6.25% and will be subject to covenants. The company also began prepaying its existing term loan with Citizens and Bank of America.
MiMedx ended the second quarter with $119 million in net cash, up $19 million from the prior-year period. During the quarter, the company spent $13 million repurchasing stock before ending the program as acquisition discussions progressed. It also incurred $4 million in one-time severance costs tied to cost-reduction actions.
Management said it expects the anticipated profitability of the combined company to support rapid deleveraging to less than three times adjusted EBITDA by the end of the first full year after the merger.
Second-quarter sales rise sequentially
MiMedx reported second-quarter net sales of $64 million, down 35% from the prior-year period but up 9% sequentially from the first quarter. June was the company’s highest sales month of the year, with $24 million in net sales.
- Surgical net sales were $39 million, up 15% year over year.
- Wound-care net sales were $25 million, down 61% year over year but up 11% sequentially.
- Wound-care volume increased 22% sequentially, while volume in wound-care centers rose 44% sequentially.
- Adjusted gross margin was 74%, while reported gross margin was 69%, compared with 81% a year earlier.
- Adjusted EBITDA loss was $8 million, improving from a $12 million loss in the first quarter.
The company said the year-over-year decline in wound-care revenue reflected Medicare reimbursement changes that took effect Jan. 1 and significantly reduced reimbursement levels across the category. Capper said the market remains affected by delayed claims processing, audits and clawbacks, low-priced products entering the market, and implementation issues related to CMS’s WISeR Model.
Still, management pointed to growing activity in wound-care centers and hospital outpatient settings as evidence of early stabilization. Capper said MiMedx is concentrating its efforts in wound-care centers, where it has seen the strongest volume gains.
Rice said the company expects gross margin to improve to the mid-70% range beginning in the third quarter, supported by cost-reduction measures and improved manufacturing throughput. MiMedx expects adjusted EBITDA to improve sequentially through the remainder of 2026 and to exit the fourth quarter in the high single digits as a percentage of revenue.
Guidance maintained
MiMedx reiterated its standalone 2026 outlook, calling for net sales between $260 million and $290 million and adjusted EBITDA approaching breakeven for the full year. The outlook excludes any impact from the proposed Sanara acquisition.
Management said it expects to be profitable in the second half of 2026 as revenue grows sequentially and cost-reduction actions take effect. The company also expects to continue investing in surgical expansion, including commercialization of newly licensed products such as G4Derm Plus and clinical evidence generation for its portfolio.
During the second quarter, MiMedx submitted two 510(k) applications to the FDA, including one for a placental-derived particulate product. Both applications were accepted for review.
About MiMedx Group (NASDAQ:MDXG)
MiMedx Group, Inc is a biopharmaceutical company focused on the development, manufacture and marketing of regenerative biomaterial products derived from human placental tissues. The company’s core mission centers on harnessing the extracellular matrix and growth factors within amniotic and chorionic membranes to support wound healing and surgical applications. MiMedx’s product line leverages proprietary purification processes designed to retain native tissue properties while ensuring sterility and safety.
MiMedx’s principal offerings include amnion/chorion allografts branded under names such as EpiFix® and AmnioFix®, which are indicated for the treatment of acute and chronic wounds—including diabetic foot ulcers, venous leg ulcers and surgical site repair.
