ReShape Lifesciences (RSLS.Q), a global weight-loss solutions leaders, announced today that it has completed its previously announced merger with Obalon Therapeutics, a vertically integrated medical technology company focused on developing and marketing medical devices.
“As a Nasdaq listed company, ReShape is poised to take advantage of the numerous benefits that accompany this new status, including the opportunity to increase shareholder value and expand visibility in the broader investment community. Completing and reaching this significant milestone represents a pivotal moment in our company’s lifecycle,” said Bart Bandy, President and Chief Executive Officer of ReShape Lifesciences.
ReShape first announced that it had entered into a definitive merger agreement with Obalon earlier this year on January 20, 2021. Under the terms of the merger agreement, which was unanimously approved by the boards of directors of both companies, ReShape stockholders will have majority ownership of the combined company. With the merger now closed, Obalon, which previously traded on the NASDAQ as OBLN, will be renamed ReShape Lifesciences and will trade under the NASDAQ ticker symbol RSLS. Furthermore, the current directors and officers of ReShape will make up the board of directors and executive management of the combined company.
With mergers happening left and right, I think summer should aptly be named “merger season”. Jokes aside, ReShape’s merger with Obalon comes on the heels of yesterday’s reverse merger between Torchlight Energy Resources and Metamaterial. However, unlike a reverse merger, ReShape and Obalon have completed an all-stock transaction, where one company buys another company’s outstanding shares from its shareholders. In this case, ReShape has essentially “acquired” Obalon, and both companies have now pooled their resources.
“The completion of this merger strengthens our ability to focus on our growth priorities, including our global commercial operations, the integration from this transaction and our internal technologies in development. We are now more confident than ever in ReShape’s ability to be a premier and diversified leader in the physician led weight loss industry, dedicated to helping more patients achieve a better quality of life through safe, effective and accessible medical treatment,” continued Mr. Bandy.
Recently collected data from the World Health Organization’s has demonstrated that the global prevalence of obesity has tripled since the mid-1970s with more than 1 billion adults being overweight. Additionally, 650 million adults and 124 million children and adolescents have been classified as obese. With this in mind, ReShape and Obalon have made a name for themselves in the weight management market which is expected to reach USD$442.3 billion by 2025, according to Grand View Research. Having now merged, Obalon’s FDA approved Balloon System will be added to ReShape’s line of minimally invasive weight-loss solutions.
According to the terms of the merger, ReShape stockholders and Obalon stockholders now own 51% and 49% of the combined company’s outstanding common stock respectively. However, a series of halts and imposed restrictions indicate that ReShape’s merger has gone anything but smoothly. ReShape’s share price opened at $9.50, up from a previous close of $9.15. The Company’s shares are down -18.03% and are trading at $7.50 as of 11:43AM ET. This indicates that there has been significant change following the news.