Zimmer Biomet Eyes Expansion into $5B Foot & Ankle Market with AcquisitionZimmer Biomet Eyes Expansion into $5B Foot & Ankle Market with Acquisition

The Warsaw, IN-based company is acquiring Paragon 28 for about $1.2 billion.

Omar Ford

January 29, 2025

2 Min Read
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Zimmer Biomet is acquiring Paragon 28 for about $1.2 billion to expand into the foot and ankle orthopedic segment.

The Warsaw, IN-based company said it plans to fund the deal, which is set to close during the first half of 2025, through a combination of cash on the balance sheet and other available debt financing sources.

Further details of the proposed deal include Zimmer Biomet acquiring all outstanding shares of common stock of Paragon 28 for an upfront payment of $13 per share in cash.

Paragon 28 shareholders will also receive a non-tradeable contingent value right (CVR) entitling the holder to receive up to $ 1 per share in cash if certain revenue milestones are achieved. The CVR will be payable in whole or in part if net sales exceed $346 million up to $361 million.

Paragon 28 was established in 2010 and has an extensive suite of surgical offerings and product systems spanning all major foot and ankle segments, including fracture and trauma, deformity correction, and joint replacement.

Paragon 28 said in 2024 it had net revenue in the range of $255.9 to $256.2 million, representing 18.2% to 18.4% reported growth over the prior fiscal year.

“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,” said Ivan Tornos, President and CEO of Zimmer Biomet. “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.”

Related:Stryker Goes Spineless

Ryan Zimmerman, a BTIG analyst weighed in on the deal in a late-night research report.

He wrote “What we like about the deal:   

  • Moving deeper into foot and ankle will allow Zimmer Biomet to accelerate growth within the SET franchise and increase the company's overall weighted average market growth rate.

  • The overall market should benefit from favorable reimbursement rates in 2025.

  • Zimmer Biomet will be able to offer a more comprehensive ASC product offering.

  • We believe Zimmer Biomet shares had an M&A overhang on them.”

Zimmerman went on to write: “What we're more critical of: 

  • Paragon 28’s sales force is primarily 1099 reps. Zimmer Biomet has put retention agreements in place with key commercial leaders within FNA. While we expect Zimmer Biomet will take steps to mitigate any disruptions, the risk has to be mentioned.

  • Paragon 28 is a highly competitive market that Zimmer Biomet will need to continue to organically invest in order to remain competitive.”

Related:Zimmer Biomet Is Pumped About Arnold Schwarzenegger Partnership

About the Author

Omar Ford

Omar Ford is a veteran reporter in the field of medical technology and healthcare journalism. As Editor-in-Chief of MD+DI (Medical Device and Diagnostics Industry), a leading publication in the industry, Ford has established himself as an authoritative voice and a trusted source of information.

Ford, who has a bachelor's degree in print journalism from the University of South Carolina, has dedicated his career to reporting on the latest advancements and trends in the medical device and diagnostic sector.

During his tenure at MD+DI, Ford has covered a wide range of topics, including emerging medical technologies, regulatory developments, market trends, and the rise of artificial intelligence. He has interviewed influential leaders and key opinion leaders in the field, providing readers with valuable perspectives and expert analysis.

 

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