Zimmer Biomet Holdings (ZBH, Financials) has entered into an agreement to acquire Paragon 28 (FNA, Financials) for approximately $1.2 billion, including an equity value of $1.1 billion.
Worth around $5 billion, the agreement broadens Zimmer Biomet's portfolio into the foot and ankle market.
Depending on income targets, Paragon 28 shareholders will get $13 per share in cash under the conditions along with an extra non-tradeable contingent value right (CVR) of up to $1 per share. Should net sales in Zimmer Biomet's 2026 fiscal year surpass $346 million, the CVR scales up to $361 million.
Approved by both businesses' boards, the deal is scheduled to conclude in the first half of 2025 depending on shareholder approval and regulatory clearances.
Established in 2010, Paragon 28 focuses on foot and ankle orthopedic devices and provides surgical treatments including joint replacement, deformity correction, and fracture and trauma repair. The purchase will improve Zimmer Biomet's standing in a high-growth market and support its ambulatory surgical center operations.
Though it estimates a temporary dilution of around 3% to adjusted profits per share in 2025 and roughly 1% in 2026, Zimmer Biomet expects the purchase to immediately help to contribute to sales growth. The purchase is expected to be accretive to income in 24 months.
Maintaining its capital allocation goals, Zimmer Biomet will fund the deal using debt and current cash. The fourth-quarter results call of the corporation on February 6, 2025 will go into further financial specifics.
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