Harvard Apparatus Regenerative Technology Files Form 10 Moving Spinoff From Harvard Bioscience Closer

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When we last checked in with Harvard Apparatus Regenerative Technology in late March, it was days away from an April IPO of 17% of its stock by parent Harvard Bioscience(HBIO). Soon afterwards, HBIO announced the postponement of the IPO, citing market conditions. On May 1, the company abandoned its plan for an IPO and declared it would spin off 100% of HART to shareholders.

Yesterday, the company took another step towards the separation, announcing that it had filed its Form 10 registration statement. The company outlined some of the preconditions to completing the spin

Completion of the spin-off is subject to a number of conditions, including the effectiveness of the Form 10, Private Letter Ruling from the IRS, execution of the Separation and Distribution Agreement between Harvard Bioscience and HART, solvency opinion, capital contribution of $15 million from Harvard Bioscience to HART, and other customary conditions. On June 28, 2013, Harvard Bioscience received a Supplemental Ruling to the Private Letter Ruling dated March 22, 2013 from the IRS to the effect that the spin-off will qualify as a transaction that is tax-free for U.S. federal income tax purposes.

The preliminary information statement can be found here.

We are intrigued by both firms and found this bullish writeup on Seeking Alpha quite interesting.  The core business should get a higher valuation as a result of spinning off  the money-losing HART business and is an acquisition target with senior leadership leaving. The new HART business has a promising technology for regenerating organs that has a huge potential market. They have already implanted regenerated tracheas into a small number of patients with some success and there are likely additional milestones to be hit in the months ahead.

Disclosure: The author holds no position in any stock mentioned

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