Zimmer Biomet Completes Acquisition of Paragon 28

Rhea-AI Summary

Zimmer Biomet (NYSE: ZBH) has completed the acquisition of Paragon 28, a specialized medical device company in the foot and ankle orthopedic space. The transaction was finalized on April 21, 2025, with Paragon 28 shareholders receiving $13.00 in cash per share plus a contingent value right (CVR) worth up to $1.00 per share based on revenue milestones.

The acquisition strengthens Zimmer Biomet's position in the $5 billion foot and ankle industry, which is experiencing high-single-digit growth. Key benefits include expanding their technology platform, leveraging Paragon 28's specialized sales organization, and accelerating growth in both U.S. and international markets. The deal also enhances opportunities in the Ambulatory Surgery Center (ASC) space.

Following the acquisition, Paragon 28 has become a wholly-owned subsidiary of Zimmer Biomet, and its shares have ceased trading on the NYSE.

Positive

• Access to $5 billion foot and ankle market with high-single-digit growth
• Acquisition of specialized sales force and dedicated foot and ankle channel
• Enhanced market penetration potential in fast-growing ASC segment
• Expanded technology platform and product portfolio

Negative

• Significant cash outlay for acquisition ($13 per share plus CVR)
• Integration costs and risks with new subsidiary
• Additional contingent payment liability up to $1 per share

Insights

Financial Strategy Expert

Zimmer Biomet's acquisition of Paragon 28 strategically expands their foot and ankle portfolio, targeting a high-growth $5B market segment with specialized sales capabilities.

The completed acquisition of Paragon 28 represents a calculated strategic expansion for Zimmer Biomet into the specialized foot and ankle segment of orthopedics. The transaction structure involves $13.00 per share in cash plus contingent value rights worth up to $1.00 per share tied to revenue milestones - a structure that balances upfront value with performance incentives.

This acquisition provides entry into a $5 billion foot and ankle market growing at high single-digits - significantly outpacing broader orthopedic sector growth. By acquiring Paragon 28's dedicated sales organization, Zimmer Biomet gains specialized access to foot and ankle surgeons, crucial for driving adoption in this technical specialty where surgeon relationships are paramount.

The transaction will accelerate Zimmer Biomet's weighted average market growth rate by increasing exposure to this high-growth segment. Additionally, it enhances the company's position in Ambulatory Surgery Centers (ASCs), where orthopedic procedures are increasingly migrating due to cost efficiencies and patient preferences.

This bolt-on acquisition logically complements Zimmer Biomet's existing fracture & trauma and joint replacement portfolios while providing new growth avenues through international expansion by leveraging their global infrastructure to distribute Paragon 28's specialized products more widely.

Medical Technology Analyst

Acquisition gives Zimmer Biomet specialized foot/ankle technology and dedicated sales channel in a fast-growing orthopedic niche worth $5B annually.

This acquisition strategically positions Zimmer Biomet in the specialized foot and ankle segment, a distinct growth opportunity within orthopedics. Unlike larger joint replacements, foot and ankle procedures require highly specialized implants and instruments due to complex biomechanics and smaller anatomical structures.

Paragon 28's exclusive focus on foot and ankle technology has enabled development of purpose-built solutions specifically designed for these procedures. This dedicated approach typically generates higher surgeon preference and adoption rates compared to generalized orthopedic portfolios from broader competitors.

The specialized sales channel acquisition is particularly valuable as technical expertise and surgeon education are essential drivers of adoption in foot and ankle orthopedics. These procedures encompass numerous techniques addressing various anatomical challenges from hindfoot fusions to metatarsal reconstructions - requiring specialized sales support.

The expansion into Ambulatory Surgery Centers is strategically timed as foot and ankle procedures increasingly migrate to these settings due to shorter recovery times and lower complexity compared to total joint replacements. Having specialized instrumentation and implant systems designed specifically for ASC settings represents a significant competitive advantage in this $5 billion market segment growing at high single-digits.

This acquisition follows the industry pattern where market leaders strengthen specialized growth segments through targeted acquisitions rather than internal development - cementing Zimmer Biomet's position in this high-growth orthopedic specialty.

Transaction Further Strengthens Company's Position in High-Growth Foot and Ankle Segment

WARSAW, Ind., April 21, 2025 /PRNewswire/ -- Zimmer Biomet Holdings, Inc. ("Zimmer Biomet"; NYSE and SIX: ZBH), a global medical technology leader, today announced it has completed the acquisition of Paragon 28, Inc. ("Paragon 28"), a leading medical device company focused exclusively on the fast-growing foot and ankle orthopedic space.

"We look forward to building on the strong foundation set by Albert DeCosta and the Paragon 28 team and are excited to officially welcome them to the Zimmer Biomet family," said Ivan Tornos, President and CEO of Zimmer Biomet. "This combination expands our leadership in the foot and ankle segment, one of the highest growth specialties in musculoskeletal care. Together, we will drive innovation at scale and leverage the power of Paragon 28's dedicated foot and ankle commercial channel to help advance our Mission to alleviate pain and improve the quality of life for people around the world."

Benefits of the Transaction
Strengthens and expands Zimmer Biomet's foot and ankle offerings through Paragon 28's leading technology platform while bolstering existing fracture & trauma and joint replacement portfolios.

Leverages Paragon 28's specialized sales organization to create a dedicated foot and ankle sales channel within Zimmer Biomet.

Complements Zimmer Biomet's global footprint and existing infrastructure with Paragon 28's expansive portfolio, which is expected to drive adoption and accelerate U.S and international growth.

Accelerates Zimmer Biomet's WAMGR given significant opportunity across a ~$5 billion foot and ankle industry growing high-single digits.

Expedites penetration opportunities in the fast-growing Ambulatory Surgery Center (ASC) space.

Completion of Acquisition
Zimmer Biomet completed the previously announced acquisition of Paragon 28 on April 21, 2025, pursuant to the Agreement and Plan of Merger by and among Zimmer, Inc., Gazelle Merger Sub I, Inc., Paragon 28 and Zimmer Biomet, dated as of January 28, 2025.

At the effective time of the acquisition, each outstanding common share of Paragon 28 was automatically cancelled and retired and converted into the right to receive (i) $13.00 in cash and (ii) a non-tradeable contingent value right (CVR) entitling the holder to receive up to $1.00 per share in cash if certain revenue milestones are achieved. Upon completion of the acquisition, Paragon 28 became a wholly-owned subsidiary of Zimmer Biomet.

With the acquisition's completion, Paragon 28 shares ceased trading on the New York Stock Exchange prior to the opening of the market on April 21, 2025, and will be delisted.

About Zimmer Biomet
Zimmer Biomet is a global medical technology leader with a comprehensive portfolio designed to maximize mobility and improve health. We seamlessly transform the patient experience through our innovative products and suite of integrated digital and robotic technologies that leverage data, data analytics and artificial intelligence.

With 90+ years of trusted leadership and proven expertise, Zimmer Biomet is positioned to deliver the highest quality solutions to patients and providers. Our legacy continues to come to life today through our progressive culture of evolution and innovation. 

For more information about our product portfolio, our operations in 25+ countries and sales in 100+ countries or about joining our team, visit www.zimmerbiomet.com or follow on LinkedIn at www.linkedin.com/company/zimmerbiomet or X/ Twitter at www.twitter.com/zimmerbiomet.

Cautionary Statement Regarding Forward-Looking Statements
This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 regarding Zimmer Biomet, which involves substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.  All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements.  In some cases, forward-looking statements can be identified by the use of forward-looking terms such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," "are confident that," "objective," "projection," "forecast," "goal," "guidance," "outlook," "effort," "target," "would" or the negative of these terms or other comparable terms.  Forward-looking statements in this release include, among other things, statements about the potential benefits of the transaction; anticipated accretion and growth rates; plans, objectives, beliefs, expectations and intentions of the board of directors of Zimmer Biomet, Zimmer Biomet management,; the financial condition, results of operations and businesses of Zimmer Biomet; and the possibility that the milestone associated with the contingent value rights are achieved in part or at all. 

These forward-looking statements are based on certain assumptions and analyses made by Zimmer Biomet in light of Zimmer Biomet's experience and Zimmer Biomet's perception of historical trends, current conditions and expected future developments, as well as other factors Zimmer Biomet believes are appropriate in the circumstances.  These forward-looking statements also are based on the current expectations and beliefs of the management of Zimmer Biomet and are subject to certain known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.  Risks and uncertainties include, among other things, (i)  risks related to the ability to realize the anticipated benefits of the transaction, including the possibility that the expected benefits from the transaction will not be realized or will not be realized within the expected time period; (ii) the risk that the businesses will not be integrated successfully; (iii) risks relating to the achievement, in part or at all, of the revenue milestone necessary for the payment of any contingent value rights; (iv) Zimmer Biomet's ability to attract, motivate or retain key executives, employees and other associates for the Paragon 28 business; (v) negative effects of the consummation of the transaction on the market price of Zimmer Biomet's common stock and on Zimmer Biomet's operating results; (vi) significant transaction costs; (vii) unknown liabilities; and (viii) (A) other risks and uncertainties discussed in Zimmer Biomet's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (in particular, the risk factors set forth under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in such Annual Reports), and (B) other risk factors identified from time to time in Zimmer Biomet's other filings with the U.S. Securities and Exchange Commission (the "SEC").  Filings with the SEC are available on the SEC's website at www.sec.gov.

The list of factors that may affect actual results and the accuracy of forward-looking statements is illustrative and is not intended to be exhaustive.  Readers are cautioned not to place undue reliance on any of these forward-looking statements. These forward-looking statements speak only as of the date hereof. Zimmer Biomet undertakes no obligation to update any of these forward-looking statements as the result of new information or to reflect events or circumstances after the date of this communication or to reflect actual outcomes, except as required by law, and expressly disclaim any obligation to revise or update any forward-looking statement to reflect future events or circumstances.

Zimmer Biomet:

Media   Heather Zoumas-Lubeski 445-248-0577 heather.zoumaslubeski@zimmerbiomet.com	Investors David DeMartino  646-531-6115  david.demartino@zimmerbiomet.com
Kirsten Fallon 781-779-5562 kirsten.fallon@zimmerbiomet.com	Zach Weiner 908-591-6955 zach.weiner@zimmerbiomet.com

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SOURCE Zimmer Biomet Holdings, Inc.

FAQ

What is the total value per share Paragon 28 shareholders will receive in the ZBH acquisition?

Shareholders will receive $13.00 in cash per share, plus a non-tradeable CVR worth up to an additional $1.00 per share if certain revenue milestones are achieved.

How will the Paragon 28 acquisition impact Zimmer Biomet's market position?

The acquisition strengthens ZBH's leadership in the foot and ankle segment, providing access to a $5 billion market growing at high-single digits.

What are the key strategic benefits of ZBH's Paragon 28 acquisition?

Benefits include expanded foot and ankle technology platform, dedicated sales channel, enhanced global footprint, and increased penetration in the ASC space.

When did Paragon 28 shares stop trading on the NYSE following the ZBH acquisition?

Paragon 28 shares ceased trading on the NYSE prior to market opening on April 21, 2025.