HQ Team
January 29, 2025: Zimmer Biomet Holdings, Inc., a US medical device maker, will acquire Paragon 28 Inc., for $1.1 billion to expand into musculoskeletal care, according to a company statement.
Zimmer will pay $12 a share in cash, and Paragon 28 shareholders will also receive a non-tradable 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 are between $346 million and $361 million during Zimmer Biomet’s fiscal year 2026, according to the statement.
Paragon 28 is a leading medical device company focused exclusively on the foot and ankle orthopaedic segment and was established in 2010. It has a suite of surgical offerings and product systems spanning all major foot and ankle segments, including fracture and trauma, deformity correction and joint replacement.
Foot and ankle offerings
The acquisition strengthens and expands Zimmer Biomet’s foot and ankle offerings through Paragon 28’s leading technology platform while bolstering existing fracture & trauma and joint replacement portfolios.
It also complements Zimmer Biomet’s global footprint and existing infrastructure with Paragon 28’s expansive portfolio, which is expected to drive adoption and accelerate US and international growth.
The buy accelerates Zimmer Biomet’s weighted average market growth rate — a metric used to measure a company’s revenue growth— given significant opportunity across a $5 billion foot and ankle industry, which is growing in high-single digits.
The proposed transaction is expected to immediately accelerate Zimmer Biomet’s revenue growth. Paragon 28 has announced net revenue for the full year of 2024 to be in a range of $255.9 to $256.2 million, representing 18.2% to 18.4% reported growth year-on-year.
ASC space
Zimmer Biomet plans to fund the proposed transaction through a combination of cash on the balance sheet and other available debt financing sources. The deal is expected to close in the first half of 2025.
“This proposed transaction further diversifies Zimmer Biomet’s portfolio outside of core orthopaedics 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 Chief Executive Officer of Zimmer Biomet.
ASC, or Ambulatory Surgical Center, is a healthcare facility that performs same-day surgeries and procedures.
“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,” Tornos said.
