ZIMMER AGREES TO BUY BIOMET FOR $13.35 BILLION (Orthopedics This Week)
In a stunning move, cross-town rivals Zimmer Holdings, Inc. and Biomet, Inc. have agreed to combine in a transaction which is valued at just over $13 billion and will affect the work lives of more than 14,000 employees and create a company with combined annual revenues of about $8 billion.
This transaction further consolidates the orthopedic industry as it puts together the #2 player (Zimmer) with the #4 player (Biomet) and reduces the number of major, diversified orthopedic implant and instrument companies from 5 to 4.
The last time Biomet was “acquired” occurred seven years ago in 2007 and the price tag was $11.4 billion.
The purchase will be paid in a combination of stock and cash. The deal is expected to close in the first quarter of 2015 and when the dust settles, Biomet shareholders will own about 16% of the combined companies.
The initial reaction from Wall Street’s analysts is positive.
Reasons for the Acquisition
In a conference call with Wall Street’s analysts this morning, Zimmer’s CEO David Dvorack said that there were four basic strategic growth reasons for the deal:
The combined companies will be ...
