Zimmer Biomet to Acquire Paragon 28 for $1.2 Billion, Expanding into the $5 Billion Foot and Ankle Segment
Zimmer Biomet has entered into a definitive agreement to acquire Paragon 28, a company dedicated to the foot and ankle orthopedic segment. Under the terms of the agreement, Zimmer Biomet will acquire all outstanding shares of Paragon 28 for an upfront payment of $13.00 per share in cash, totaling an equity value of approximately $1.1 billion, with an enterprise value of about $1.2 billion. Additionally, Paragon 28 shareholders will receive a contingent value right (CVR), potentially adding up to $1.00 per share based on future revenue milestones.
Founded in 2010, Englewood, CO-based Paragon 28 has specialized in innovative surgical solutions across all major aspects of foot and ankle care. This acquisition aligns with Zimmer Biomet’s strategy to diversify its portfolio and expand into high-growth markets, including the rapidly expanding $5 billion foot and ankle sector, particularly in ambulatory surgical centers (ASCs).
Ivan Tornos, President and CEO of Zimmer Biomet, noted that this acquisition positions the company strongly in a fast-growing segment and enhances cross-selling opportunities. Albert DaCosta, Chairman and CEO of Paragon 28, expressed pride in his company’s industry leadership and anticipates that joining forces with Zimmer Biomet will further their mission to advance foot and ankle care solutions.
The transaction, which has been unanimously approved by the boards of both companies, is expected to be immediately beneficial to Zimmer Biomet’s revenue growth, with Paragon 28’s revenues for 2024 anticipated to be between $255.9 and $256.2 million. Although initially expected to dilute Zimmer Biomet’s adjusted earnings per share in 2025 and 2026, the acquisition is projected to be accretive within 24 months post-closing.
Funded through cash and debt financing, the acquisition is pending regulatory and shareholder approvals, with closure expected in the first half of 2025. The financial impacts of this transaction will be further discussed in Zimmer Biomet’s upcoming earnings call on February 6, 2025.
