DJO Incorporated's beginnings are tied to professional sports. The company was
founded in the Carlsbad, California garage of Philadelphia Eagles football player
Mark Nordquist in 1978. Nordquist, who wrapped an old inner tube around his
unstable knee for support, teamed up with two of his friends to explore the
possibilities of using neoprene instead. Their new Company - then named
DonJoy after two of the men's wives, Donna and Joy - had its first products, "kneesleeves",
constructed from old neoprene wetsuits. This innovative concept attracted interest
and the company soon embarked on a research and engineering program that would
advance the world of bracing.
The introduction of the Defiance (1992) and Legend (1995) functional knee braces put DonJoy
on the map. Defiance, designed for active adult and adolescent patients with
moderate to severe knee ligament instabilities, became the company's flagship
product. By completely customizing the product to suit the patient's individual
needs and providing a low profile, lightweight brace with a lifetime guarantee,
top athletes could be confident in returning to their sport of choice. The Legend,
meanwhile, became the top ‘patient-ready’ brace for active adults
and adolescents. These key products served as a foundation that helped DonJoy
tap its full potential as an orthopedic products provider.
In 1987, DonJoy was purchased by Smith & Nephew Inc. and ProCare was acquired
in 1995. The following year, DJO Incorporated's OfficeCare soft goods inventory
and billing system began assisting orthopedic practitioners by handling all
paper work, inventory monitoring, order fulfillment and billing for a variety of
orthopedic products from top manufacturers. New braces and trademarked billing
system enhanced the market and fueled the company's desire to grow.
The unification of the DonJoy and ProCare product lines within one 270,000
square foot facility in Vista, California, brought about the concentration of
research energies and turned 1998 into a banner year. Then known as the Bracing
and Support Systems division of Smith and Nephew, the company launched four
top-of-the-line knee braces: Defiance, the number one selling functional knee
brace, was further improved with increased durability and a wide range of new
colors and unique patterns. Opal catered to the functional and aesthetic needs
of the osteoarthritis patient and TROM, with its total range of motion, was
designed exclusively for rehabilitative purposes. The Drytex product line was
extended that same year to include four new wraparound products and a sized
ankle sleeve.
In 1999, Chase Capital Partners (CCP), Fairfield Chase Medical Partners and
senior management acquired the company from Smith and Nephew. Shortly after the acquisition, the company
changed its name to dj Orthopedics,and later, to DJO Incorporated, the first of many steps designed to aggressively
expand and reposition the company within the sports medicine industry.
As always, DJO Incorporated is committed to building both opportunities for growth
and relationships. Based on the company's reputation as a dominating force in
the orthopedics industry with a history of outfitting world-class athletes,
DJO Incorporated was selected as the official medical supplier and exclusive knee
brace provider for the U.S. Ski and Snowboard Teams.
DJO Incorporated continues to look to the future, broadening its product offerings
to include a wide array of solutions for the sports medicine industry to Never
Stop Getting Better.
Overview
We are a leading global provider of high-quality, orthopedic devices, with a broad range of products used for rehabilitation, pain management and physical therapy. We also develop, manufacture and distribute a broad range of surgical reconstructive implant products. We are the largest non-surgical orthopedic rehabilitation device company in the United States and among the largest globally, as measured by revenues. Many of our products have leading market positions. We believe that our strong brand names, comprehensive range of products, focus on quality, innovation and customer service, extensive distribution network, and our strong relationships with orthopedic and physical therapy professionals have contributed to our leading market positions. We believe that we are one of only a few orthopedic device companies that offer healthcare professionals and patients a diverse range of orthopedic rehabilitation products addressing the complete spectrum of preventative, pre-operative, post-operative, clinical and home rehabilitation care. Our products are used by orthopedic specialists, spine surgeons, primary care physicians, pain management specialists, physical therapists, podiatrists, chiropractors, athletic trainers and other healthcare professionals to treat patients with musculoskeletal conditions resulting from degenerative diseases, deformities, traumatic events and sports-related injuries. In addition, many of our non-surgical medical devices and related accessories are used by athletes and patients for injury prevention and at-home physical therapy treatment.
Our current business activities are the result of a combination of two companies with broad orthopedic product offerings in the United States and foreign countries. One of those companies, ReAble Therapeutics, Inc. (“ReAble”), was a leading manufacturer and distributor of electrotherapy products for pain therapy and rehabilitation, a broad range of clinical devices for the treatment of patients in physical therapy clinics, and a broad range of knee, hip and shoulder implant products. In 2006, ReAble was acquired by an affiliate of Blackstone Capital Partners V L.P. (“Blackstone”). The other company, DJO Opco Holdings, Inc. (“DJO Opco”), formerly named DJO Incorporated, was a leading manufacturer and distributor of orthopedic rehabilitation products, including rigid knee bracing, orthopedic soft goods, cold therapy systems, vascular systems and bone growth stimulation devices. On November 20, 2007, ReAble acquired DJO Opco through a merger transaction (the “DJO Merger”). ReAble then changed its name to DJO Incorporated (“DJO”) and continues to be owned primarily by affiliates of Blackstone.
Historical financial results include results of ReAble and its subsidiaries before and after its acquisition by Blackstone and include the results of DJO Opco from the date of the DJO Merger through December 31, 2007. Pro forma financial information (unaudited) includes the combined results of operations of DJO Opco and ReAble as though the companies had been combined as of the beginning of each of the periods presented. Pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of each of the periods presented.
DJO Incorporated (formerly named ReAble Therapeutics, Inc.), a company incorporated in the State of Delaware in March 1995, and its consolidated subsidiaries. Each one of the following trademarks, trade names or service marks, is either (i) our registered trademark, (ii) a trademark for which we have a pending application, (iii) a trade name or service mark for which we claim common law rights or (iv) a registered trademark or application for registration which we have been licensed by a third party to use: Encore®, OTI Osteoimplant Technology, Inc®, Cefar®, Empi®, Ormed® Chattanooga Group™, Compex®, EmpiCare®, Aircast®, DonJoy®, OfficeCare®, ProCare®, SpinaLogic®, RME™, CMF™, OL1000™, and OL1000 SC™ . All other trademarks, trade names or service marks of any other company appearing in this Annual Report on Form 10-K belong to their respective owners.
The DJO Merger
On November 20, 2007, a subsidiary of ReAble was merged into DJO Opco, with DJO Opco continuing as the surviving corporation. As a result of the DJO Merger, DJO Opco became a subsidiary of ReAble Therapeutics Finance LLC, the entity filing this Annual Report on Form 10-K, which was itself a subsidiary of ReAble. The former stockholders of DJO Opco were paid $50.25 for each share of DJO Opco common stock held on the date of the DJO Merger, constituting a total purchase price for the equity of DJO Opco of approximately $1.3 billion. The financing for the DJO Merger involved payment to the DJO Opco stockholders, refinancing of DJO Opco and ReAble senior debt, debt issue costs, and transaction costs and expenses, all of which amounted to a total of approximately $2.0 billion. The source of this financing was a combination of equity contributed by Blackstone of $434.6 million, a new ReAble Therapeutics Finance LLC senior secured credit facility (the “New Senior Secured Credit Facility”) of approximately $1.1 billion, and a total of $575.0 million principal amount of new 10.875% senior notes co-issued by ReAble Therapeutics Finance LLC (the “10.875% Notes”). A total of $200.0 million principal amount of 11.75% senior subordinated notes (the “11.75% Notes”) co-issued by ReAble Therapeutics Finance LLC remained outstanding. Following the DJO Merger, ReAble was renamed DJO Incorporated, ReAble Therapeutics Finance LLC was renamed DJO Finance LLC (“DJOFL”) and ReAble Therapeutics Finance Corporation, the co-issuer of both the 10.875% Notes and the 11.75% Notes, was renamed DJO Finance Corporation (“Finco”).
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Last Updated: 7/18/2008
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