DVORAK AND BINDER ENCOURAGE ZIMMER/BIOMET EMPLOYEES (Orthopedics This Week)
Letter to Zimmer-Biomet Employees
Dave Dvorak and Jeff Binder (the CEOs) tell their sales reps in a May 20, 2014 letter that it is their intention to retain all sales rep positions when their companies, Zimmer Holdings, Inc. and Biomet, Inc. merge in 2015. We reviewed the letter from a regulatory filing.
Judging by the overwhelming response by OTW readers to Drue De Angelis’ letter to his former colleagues, it’s clear that many employees are concerned over keeping their jobs, understanding how the very different cultures of the companies will coexist and what happens to their competition for customers while integration takes place. The CEOs address those issues.
Protect Ongoing Business
The CEOs write that an important objective during integration “is to protect our ongoing businesses’ momentum by continuing to focus on our respective Customers and their patients. While using this integration planning process to create a shared vision of our culture, strategy and operating model, we should keep in mind that we are independent companies until the transaction closes and we must compete as vigorously as we did before the announcement of the merger.”
Because the companies have highly recognizable names, they write there is often significant media attention and employees are to direct media inquiries to the proper company spokespeople.
“We have heard from many of you since the merger announcement… [So] we have attached an updated list of FAQs (Frequently Asked Questions). If you have additional questions, feel free to direct them to [email protected]. We will provide periodic updates to the FAQ document over the coming weeks and months and we are committed to keeping you informed as important decisions are made.”
Here are the first issues addressed by the CEOs:
Sales Integration
“It is important to remember that this transaction is in large part about growth, and it is our intention that all sales representative positions from both companies will be retained post-closing. In fact, we believe this combination will lead to greater opportunities for the advancement and growth of sales representatives of the combined company.”
Spine
“Enhancing the market competitiveness of some of the smaller businesses of each company was one of the reasons behind this combination. The addition of the Biomet Spine business will provide Zimmer an increased opportunity to reinvest in product development, offer additional medical education and training, and enhance our global distribution channel. In addition, we will be better positioned to recruit and retain sales talent with an expanded product portfolio.
Customer Feedback
“The feedback and tone has overall been positive. Many Customers have expressed their excitement regarding how the combined company will have a greater opportunity to innovate, not just at the product and technology level, but through services and comprehensive solutions offered by virtue of the increased resources and talent of the combined company.”
Merging Cultures
“There are many aspects of our cultures that make for a very good fit…We will be identifying the best organizational and cultural practices from both organizations in order to form a new entity that leverages the strengths of both companies…shap[ing] the optimal culture…is critically important for our successful integration. The objective is to build an even stronger organization that offers more for employees, sales representatives and our Customers after the integration is completed. Employee involvement in this process will be vital to our success.”
Status of Zimmer’s Quality Excellence Initiatives
“Until the transaction is successfully completed…we remain an independent company, and it will be business as usual at Zimmer. Successful execution is a top priority and this will not change as a result of the integration planning work. Remaining focused and concentrating on doing your best is how you can have a positive impact on the success of Zimmer.”
Integration Steering Committee
There will be an Integration Steering Committee (ISC), an Integration Management Office and a variety of functional, business unit, regional and other dedicated integration teams. “Importantly, all integration oversight and planning teams will be composed of representatives from both Zimmer and Biomet.”
The ISC will oversee the execution of an integration planning strategy; and will identify a multi-phase planning process to facilitate a “smooth and seamless integration after the close of the transaction.”
There will be eight members of the committee made up of four leaders from each company. In addition to the CEOs (Dvorak and Binder), CFOs (Jim Crines and Dan Florin) and Human Resource Senior VPs (Bill Fisher and Peggy Taylor), Zimmer is sending Chad Phipps, their general counsel and secretary, while Biomet is sending in Dan Williamson, their head of reconstructive joints.
To read the letter in its entirety, click here: http://investor.zimmer.com/secfiling.cfm?filingID=1193125-14-206672