Zimmer Biomet Snaps Up Paragon 28 In $1.2 Billion Deal: Details

Paragon 28, Inc. FNA shares are trading higher premarket on Wednesday. On Tuesday, the company inked a deal to be acquired by Zimmer Biomet Holdings, Inc. ZBH at around $1.1 billion in equity and $1.2 billion in enterprise value.

Zimmer Biomet plans to purchase all common shares of Paragon 28 for for an upfront payment of $13.00 per share in cash.

Also, Paragon 28 shareholders will receive a non-tradeable contingent value right (CVR) of up to $1.00 per share in cash, contingent on revenue milestones.

The CVR will be payable in full or partially if net sales fall between $346 million and $361 million during Zimmer Biomet’s fiscal year 2026.

The transaction, which has been unanimously approved by the boards of directors of both companies, remains subject to regulatory approvals, Paragon 28 stockholder approval, and other customary closing conditions.

Zimmer Biomet expects the acquisition to enhance its revenue growth immediately.

Taking financing into account, Zimmer Biomet anticipates the transaction will be around 3% dilutive to adjusted EPS in 2025, about 1% dilutive in 2026, and accretive within 24 months of closing.

Earlier, Paragon 28 projected 2024 net revenue of $255.9 million-$256.2 million (vs. consensus of $254.6 million), reflecting a growth rate of 18.2%-18.4% year-over-year.

Ivan Tornos, President and Chief Executive Officer of Zimmer Biomet said, “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, while creating cross-selling opportunities in the rapidly growing ASC space.”

“Paragon 28’s broad and innovative foot and ankle portfolio, robust product pipeline and dedicated and highly trained sales force, combined with Zimmer Biomet’s global reach and capabilities, will uniquely position us to address the unmet patient needs of this highly complex anatomy.”

The acquisition will be funded through a combination of cash on hand and available debt financing. The deal is expected to be finalized in the first half of 2025.

Price Action: FNA shares are up 8.50% at $13.02 premarket at the last check Wednesday.

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