Oct 10 (Reuters) - NuVasive Inc on Tuesday filed a lawsuit accusing a former executive and director of discouraging the company from buying rival medical device maker Alphatec Holdings Inc so he could invest in Alphatec himself, and ultimately become its executive chairman.
The complaint, filed in Delaware Chancery Court, also accused the former executive, Patrick Miles, of soliciting NuVasive employees to join him at Alphatec, violating an earlier agreement.
It includes claims for breach of contract, breach of fiduciary duty and fraudulent inducement. NuVasive is asking the court to compel Miles to pay back his compensation and pay unspecified punitive damages.
A lawyer for Miles could not immediately be identified. Alphatec could not immediately be reached for comment.
Both NuVasive and Alphatec are based in California and specialize in spine implants.
Miles worked for NuVasive for 17 years, including as president and chief operating officer in 2015 and 2016, according to the complaint. In August 2016, he was appointed to the company’s board, and the following month was named vice chairman, the complaint said.
NuVasive said that in January 2016, UBS Financial Services Inc contacted the company about whether it would be interested in acquiring Alphatec. Miles told NuVasive that pursuing the deal would be “a waste of time” because Alphatec had an “aged, undifferentiated portfolio,” the lawsuit said.
NuVasive claimed that in March 2017, Miles bought $500,000 of Alphatec stock in a private placement, and in September 2017 accepted an offer from Alphatec to serve as executive chairman. As part of the offer, Miles was given stock worth more than $3 million as of Oct. 2, NuVasive said.
Miles also agreed to purchase additional shares worth nearly $3 million, and was promised warrants that could give him ownership of 23 percent of Alphatec’s outstanding stock, according to NuVasive.
Miles told NuVasive he was resigning on Oct. 1, according to the complaint. NuVasive also claimed that Miles has solicited NuVasive employees and customers, and that at least one employee, a senior associate product manager, has left to join Miles at Alphatec. (Reporting by Brendan Pierson in New York; Editing by Matthew Lewis)