Regeneration Technologies, Tutogen Medical Announce Agreement to Merge

Business Wire, Nov 13, 2007

* Merger creates a leading global company in the biologics industry

* Transaction expected to be accretive in 2008 earnings per share

* Compelling strategic fit with highly complementary product lines and distributor mix, increasing growth and diversification

* $5 million - $6 million of identified annual cost synergies, when fully realized, with revenue enhancement upside opportunities

ALACHUA, Fla. -- Regeneration Technologies, Inc. (RTI) (Nasdaq:RTIX), a leading processor of orthopedic and other biologic implants, and Tutogen Medical, Inc. (Amex:TTG), a leading manufacturer of sterile biological implants made from human (allograft) and animal (xenograft) tissue, today announced that the boards of directors of both companies have unanimously approved a definitive agreement to combine the two companies in a tax-free, stock-for-stock exchange.

The combined company will be the leading provider of sterile biologic solutions for patients around the world, with a diverse mix of implants and distributors. The merged company will benefit from cost synergies and enhanced opportunities for revenue growth and increased profitability.

"When comparing the similarities between Tutogen and RTI - our commitment to safety and sterilization of biologics, our responsibility for honoring donor families and helping recipients, and our culture of investment to meet the needs of surgeons around the world - it is easy to see how these two companies will fit very nicely together," said Brian K. Hutchison, RTI's chairman, president and CEO. "Guy Mayer and the management team at Tutogen have done an outstanding job in the past two years of realigning their company and product lines, as well as optimizing their distribution channels to set the stage for continued growth in the years to come."

"We believe that our strength in the tissue membrane markets and our expertise in xenograft applications will blend perfectly with RTI's strength in innovation and leadership in the orthopedics markets," said Guy Mayer, Tutogen's president and chief executive officer. "Each company's complementary strengths will create a very well-balanced leader in the biologics industry."

Under the terms of the merger agreement, Tutogen shareholders will receive 1.22 shares of newly issued RTI common stock in exchange for each share of Tutogen common stock they own. Based on RTI's closing stock price of $10.54 per share on Nov. 12, 2007, this represents a value of $12.86 per Tutogen share, or an aggregate equity value of approximately $263 million. Upon completion of the merger, RTI stockholders will own approximately 55 percent of the combined company and Tutogen stockholders will own 45 percent of the company, on a diluted basis.

As a result of the transaction, the combined company expects to have a total of 56 million shares outstanding upon the closing, composed of 31 million currently outstanding shares of RTI common stock and 25 million shares of RTI common stock to be issued to Tutogen shareholders.

The combined company will be headquartered in Alachua, Fla. under the leadership of Brian Hutchison as chairman and CEO. Tom Rose, currently vice president, CFO and secretary of RTI, will serve in the same capacity of the combined entity. Guy Mayer, currently president and CEO for Tutogen, will become president of the combined company, with a focus on international activities and sales and marketing. He will also join the board of directors. L. Robert Johnston, currently vice president and CFO of Tutogen, will serve as vice president of finance for the combined company.

The new board of directors will be comprised of all seven directors from RTI's current board and five directors from Tutogen's board, bringing the total number of directors to 12, including Hutchison and Mayer.

Benefits of the Merger

The transaction will combine RTI's expertise for science, safety and innovation in biologics for orthopedics with Tutogen's leadership in sterile biologic implants for dental, hernia and other specialty surgeries. Specific benefits of the merger include:

* Diversification of markets, enabling the company to help more patients with sterile, biological solutions. RTI focuses on implants addressing the spine, sports medicine, bone graft substitutes and general orthopedics markets. Tutogen has a complementary focus on dental implants and surgical specialties including urology, obstetrics/gynecology, breast reconstruction, hernia, ophthalmology and ENT markets, as well as implants addressing the spine market. The combined revenue product mix is estimated to be 32 percent spine, 17 percent dental, 16 percent sports medicine, 10 percent bone graft substitutes, 14 percent international and 5 percent surgical specialties, with the remaining 6 percent attributed to other categories.

* Balanced distribution model with reduced concentration risk. In addition to direct distribution networks for RTI's sports medicine implants and Tutogen's international business the combined company will create a balanced diversification of strong distributors across its product lines. Distributors of RTI's products include Medtronic, Stryker, Orthofix, Wright Medical, Exactech and Zimmer, among others. Distributors of Tutogen's implants include Zimmer, Davol (a subsidiary of C.R.Bard), Mentor, Coloplast and IOP Inc.