Small headline, big story.
Details are a little scant at the moment, but what we have gleaned from various sources, including a PR Newswire press release, is that both boards have approved a deal that will see Zimmer Holdings acquire orthopaedic giant Biomet in a deal that will cost it some $13.35 Billion, of which $10.35 Billion will be cash and the balance shares to Biomet shareholders. What we’ll be left with is Zimmer shareholders owning 84 percent of the combined company, with Biomet shareholders owning 16 percent.
Zimmer will see the acquisition as an excellent opportunity to cement its position in the pantheon of big ortho. It’s not found the going easy in recent years, especially on its home turf of hip and knee prostheses. For its part, Biomet has been an enduringly dynamic place to be. Back in 2007 it was acquired for a reported $11.3 billion by Blackstone Group, KKR & Co., TPG and Goldman Sachs Group Inc.’s buyout arm, following which, earlier this year it started the IPO wheels in motion in order to pay off its debt carried over from the 2007 deal.
Undoubtedly a move that represents a further consolidation of the orthopedic industry, will bring with it a significant opportunity to benefit from economies of scale. In other words, building on Zimmer and Biomet’s cumulative revenue of roughly $7.8 billion will be achievable with significant cost savings, already publically estimated by Zimmer to come in at over $270 million by the third year after completion, itself likely to occur early in 2015.
Company comments
for Zimmer
“We believe that current demographic and macroeconomic trends affecting the health care industry will reward companies that successfully partner with other key stakeholders to improve patient care in a cost-effective manner,” said David C. Dvorak, Zimmer’s chief executive. “Together with Biomet we will expand the scope of our innovation programs and will enhance our efforts to provide integrated services and comprehensive solutions that address the needs of our customers.”
for Biomet
“Biomet and Zimmer share a 36-year history of mutual respect,” said Jeffrey R. Binder, Biomet’s president and chief executive. “Both companies are deeply rooted in the communities in which we operate and believe that we can only be successful in business if we are successful in helping health care providers improve the lives of patients.”
Full PR Newswire press release, here.
published: April 24, 2014 in: Biomet, Mergers and Acquisitions, Orthopaedics, Zimmer