Zimmer Biomet expands foot and ankle portfolio with $1.2bn Paragon 28 acquisition

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Zimmer Biomet Holdings, Inc. has entered into a definitive agreement to acquire Paragon 28, Inc., a leading medical device company specialising in foot and ankle orthopedic solutions, in a deal valued at approximately $1.2 billion. The acquisition, which includes an upfront cash payment of $13.00 per share and a contingent value right (CVR) based on revenue milestones, is expected to enhance Zimmer Biomet’s financial profile and accelerate its expansion in the high-growth foot and ankle market.

The transaction, unanimously approved by the boards of both companies, positions Zimmer Biomet to capitalise on the increasing demand for and strengthen its presence in the sector.

A Major Step in the Foot and Ankle Market

Paragon 28, established in 2010, has developed a comprehensive portfolio of surgical solutions, spanning fracture and trauma management, joint replacement, and deformity correction. Its innovative approach has positioned the company as a leader in addressing within the foot and ankle segment, which represents a $5 billion market opportunity growing at high-single-digit rates.

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Zimmer Biomet, a global medical technology leader, sees the acquisition as a natural extension of its existing portfolio, allowing it to offer a more comprehensive range of musculoskeletal solutions. CEO highlighted the strategic benefits of the deal, stating that Paragon 28’s product portfolio, robust innovation pipeline, and strong sales force will enhance Zimmer Biomet’s competitive advantage.

“This proposed transaction further diversifies Zimmer Biomet’s portfolio outside of core orthopedics and positions us well in one of the highest growth specialized segments in musculoskeletal care,” Tornos noted. “Paragon 28’s broad and innovative foot and ankle portfolio, robust product pipeline, and dedicated sales team will uniquely position us to address unmet patient needs.”

Financial and Strategic Implications

Zimmer Biomet expects the acquisition to be immediately accretive to revenue growth and anticipates it will contribute positively to adjusted earnings per share (EPS) within 24 months of deal closure. Paragon 28 has projected full-year 2024 revenue in the range of $255.9 to $256.2 million, representing an 18.2% to 18.4% growth over the previous year.

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The acquisition is also expected to accelerate Zimmer Biomet’s weighted average market growth rate (WAMGR) by tapping into the rapidly expanding surgical market. Paragon 28’s established infrastructure and innovative product line are expected to drive both U.S. and international adoption, particularly in the ambulatory surgery center (ASC) segment, which continues to experience strong growth.

Albert DaCosta, Chairman and CEO of Paragon 28, expressed confidence in the acquisition, stating that the merger would allow Paragon 28 to scale its operations while continuing to innovate. “Joining Zimmer Biomet is an exciting new chapter for Paragon 28 and an incredible opportunity to advance our mission and continue to deliver groundbreaking solutions in the foot and ankle segment.”

Regulatory and Financial Considerations

Zimmer Biomet plans to finance the acquisition through a combination of cash reserves and debt financing. Despite an initial impact on earnings, the company expects the transaction to be approximately 3% dilutive to adjusted EPS in 2025 and 1% in 2026, with positive contributions thereafter.

The deal is subject to regulatory approvals, shareholder approval from Paragon 28, and customary closing conditions. Zimmer Biomet anticipates finalising the transaction in the first half of 2025. The company will provide further details on the financial impact of the acquisition during its fourth-quarter earnings call on February 6, 2025.

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Looking Ahead: Expanding Zimmer Biomet’s Reach

This acquisition marks a significant step in Zimmer Biomet’s broader strategy to diversify beyond traditional orthopedic markets and strengthen its leadership in musculoskeletal innovation. The company has been increasingly focused on high-growth specialty segments, leveraging data-driven solutions, artificial intelligence, and advanced robotics to improve patient outcomes.

With Paragon 28’s extensive expertise in foot and ankle surgery, Zimmer Biomet is positioned to capture a larger share of the market and offer a more comprehensive suite of solutions to healthcare providers worldwide.


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