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Acquisition - EnteroMedics acquires ReShape Medical

Acquisition adds approved, revenue-generating balloon technology for obesity

EnteroMedics has announced that it has acquired ReShape Medical, a privately-held medical technology company that develops, manufactures and markets the ReShape Dual Weight Loss Balloon, an FDA-approved, minimally invasive intragastric balloon designed to treat obesity patients with a BMI 30-40, with one or more related comorbid conditions.  

"We are pleased to announce this significant transaction, which adds a new minimally invasive, revenue-generating technology to the EnteroMedics portfolio," said Dan Gladney, President, Chief Executive Officer and Chairman of the Board of EnteroMedics. "The acquisition of the ReShape Dual Weight Loss Balloon, which complements our existing products with a non-surgical weight loss solution, expands our addressable market and gives us yet another touch point along the continuum of care in obesity."

Under the terms of the agreement, the consideration paid by EnteroMedics for ReShape Medical consists of 2,356,729 shares of common stock, 187,772 shares of series C convertible preferred stock (which will be convertible into 18,777,200 shares of common stock upon the receipt of the required approval of EnteroMedics' stockholders under NASDAQ rules), and approximately US$5.0 million in cash, which amount will be immediately used to pay ReShape Medical's outstanding senior secured indebtedness and certain transaction expenses of ReShape Medical. EnteroMedics agreed to hold a special meeting of its stockholders by December 2017 to seek the required approval of the conversion of the series C convertible preferred stock into shares of common stock.

"EnteroMedics and ReShape Medical are two innovative companies that share a strong strategic focus on providing proprietary, patient-friendly technologies to address the global obesity epidemic," continued Gladney. "We look forward to combining the complementary expertise and capabilities of both companies for the benefit of our customers, patients, employees and stockholders."

Dan Gladney will continue as President, Chief Executive Officer and Chairman of the Board of EnteroMedics. EnteroMedics has agreed to add two designees of ReShape Medical to the Board of Directors of EnteroMedics. Dr Michael Y Mashaal has joined the Board effective as of the closing of the acquisition and one additional ReShape Medical designee will be added at a later date.

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