Zimmer Biomet to Acquire Paragon 28 for $1.1B

By Bobby Samwell • Wednesday, January 29 10:32 • Permanent Link

Zimmer Biomet Holdings, Inc. has announced its definitive agreement to acquire Paragon 28, Inc., a leading medical device company focused on the foot and ankle orthopedic segment. The acquisition is valued at approximately $1.1 billion in equity and $1.2 billion in enterprise value, with an upfront payment of $13.00 per share in cash for Paragon 28's outstanding shares.

Paragon 28 has reported net revenue for the full year of 2024 in the range of $255.9 to $256.2 million, representing 18.2% to 18.4% reported growth over the prior fiscal year. Zimmer Biomet expects the proposed transaction, considering the impact of financing, to be approximately 3% dilutive to adjusted earnings per share in 2025, about 1% dilutive to 2026 adjusted earnings per share, and accretive to adjusted earnings per share within 24 months of the deal close.

Zimmer Biomet plans to fund the proposed transaction through a combination of cash on the balance sheet and other available debt financing sources. The closing of the proposed transaction is subject to receipt of required regulatory approvals, approval by Paragon 28 stockholders, and other customary closing conditions, and is anticipated to close in the first half of 2025.

Paragon 28's extensive suite of surgical offerings and product systems spans all major foot and ankle segments, including fracture and trauma, deformity correction, and joint replacement. This proposed acquisition is expected to strengthen and expand Zimmer Biomet’s foot and ankle offerings through Paragon 28’s leading technology platform while complementing Zimmer Biomet’s global footprint and existing infrastructure.

The financial impacts of the acquisition on Zimmer Biomet's 2025 results will be discussed in the upcoming fourth quarter 2024 earnings call scheduled for February 6, 2025. Goldman Sachs & Co. LLC is serving as the exclusive financial advisor to Zimmer Biomet, while Piper Sandler & Co. is serving as the exclusive financial advisor to Paragon 28. Hogan Lovells US LLP and Cravath, Swaine & Moore LLP are serving as legal advisors to Zimmer Biomet and Paragon 28, respectively. Following these announcements, the company's shares moved 8.6%, and are now trading at a price of $13.03. For the full picture, make sure to review Paragon 28's 8-K report.

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