Zimmer finally gives up on the spine business entirely.

Zimmer is a world-class total joint company that has tried to diversify into spine over and over again… and failed. Hindsight says that they should have focused on joints.

Let’s look at the history of missteps with spine.

2003 -Zimmer acquires the old SpineTech business (MN) through the Centerpulse acqusition.

2008 – Zimmer acquires the Spinal Concepts business from Abbott Spine.

2014 – Zimmer acquires Lanx as part of the Biomet merger

2016 – Zimmer acquires LDR Spine

2022- Zimmer spins out Spine business and Dental business as new public company – ZimVie. Never profitable. Stock tanks.

2023 – ZimVie sells spine business once and for all.

Three thoughts:

1/ $1,757M in investments turns into $375M sale.

Adding up the costs of Zimmer spine acquisitions:

  • Spinal Concepts: $360 million
  • Lanx: $147 million
  • LDR: $1.0 billion
  • A&E Medical Corporation: $250 million
    Total Acquisition Costs: $1,757 million

2/ Market cap of ZimVie is $450M and they sell spine for $375M, so the remaining dental business may be worth only $75M after the sale. The $375M proceeds from the sale will be used to pay down some of the ZimVie debt.

3/ Rumors are that HIG Capital will be rolling up some spine businesses to create a spine powerhouse. They will do this while the acquisition costs are low. Look for more spine acquistions.


ZimVie to Shed Spine Biz, Become Pure-Play Dental Firm (ODT)

ZimVie has entered an agreement to sell its spine business to global alternative investment firm H.I.G. Capital.
The company said it intends to ise the after-tax proceeds to reduce debt, consistent with its stated capital allocation priorities. The deal is expected to be accretive to ZimVie’s revenue growth rate, EBITDA margin, and cash flow conversion rate by allowing the it to streamline operations and sharpen its focus as a pure-play dental company.
ZimVie will receive $375 million, comprised on $315 million in cash and $60 million in a promissory note that will accrue interest at a rate of 10% per year.
“We are pleased to reach an agreement with H.I.G. Capital for the strategic sale of our core spine, motion preservation, and EBI Bone Healing portfolio and services. Our spine business possesses an innovative portfolio, and is well positioned to continue to improve under this new ownership. Similarly, this transaction provides the capital to fund go-forward growth for dental’s commercial and innovation platforms while reducing ZimVie’s leverage profile,” said Vafa Jamali, ZimVie’s president and CEO. “This transaction is intended to create a leaner, more focused ZimVie with a leading position in attractive and growing global dental markets.”
“We would also like to thank all of our employees globally. Our teams have made tremendous contributions to transforming and improving our business profile, and these actions continue today,” Jamali added.
“The ZimVie spine business has a solid foundation with a market-leading product portfolio, strong surgeon satisfaction and exceptional patient outcomes,” said Mike Gallagher, Managing Director at H.I.G. Capital. “We see a tremendous opportunity to partner with the spine leadership team to support best-in-class innovation and robust commercial execution. The combination of H.I.G.’s expertise in the medical device space and the capabilities of ZimVie

Read also – Don’t take advice from failed companies that don’t know why they are failing.