By Denny Jacob

Paragon 28 shares rose 8.4% after Zimmer Biomet Holdings agreed to acquire the company.

Shares were trading around $13.02. The stock is up about 2.6% over the last year.

Zimmer, a medical-technology company, agreed to acquire all outstanding shares of the medical-device maker's common stock for $13 a share in cash, the companies announced Tuesday evening. The deal has an equity value of about $1.1 billion and an enterprise value of about $1.2 billion, according to the companies.

Shareholders of Englewood, Colo.-based Paragon 28, which focuses exclusively on the foot and ankle orthopedic segment, will also receive a non-tradeable contingent value right that entitles holders to receive up to $1 a share in cash if certain revenue milestones are achieved.

The boards of directors for both companies have unanimously approved the proposed deal.

Warsaw, Ind.-based Zimmer said the deal is expected to immediately accelerate its revenue growth. The company also expects it to be about 3% dilutive to adjusted earnings per share in 2025, about 1% dilutive to 2026 adjusted earnings per share, and accretive to that metric within 24 months of the deal closing.

The deal, subject to approval and other closing conditions, is expected to close in the first half of 2025.

Needham's Mike Matson in a note Wednesday said the deal price is lower than he expected but that the list of potential acquirers is short. "While a higher bid is possible, we think it is unlikely," he said.

Matson also said both companies' market shares are low in the $5 billion foot-and-ankle market, and he doesn't anticipate antitrust issues.

Shares of Zimmer ticked down around 0.8% to $110.98.

Write to Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

January 29, 2025 11:47 ET (16:47 GMT)

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