Zimmer Biomet To Acquire Paragon 28 For Enterprise Value Of About $1.2 Bln

(RTTNews) - Zimmer Biomet Holdings Inc. (ZBH) agreed to acquire all outstanding shares of common stock of Paragon 28 Inc. (FNA) for an upfront payment of $13.00 per share in cash, corresponding to an equity value of approximately $1.1 billion and an enterprise value of about $1.2 billion.

Paragon 28 shareholders will also receive a non-tradeable contingent value right (CVR) entitling the holder to receive up to $1.00 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 during Zimmer Biomet's fiscal year 2026.

The board of directors of each of Zimmer Biomet and Paragon 28 has unanimously approved the proposed transaction.

Zimmer Biomet expects the proposed transaction will immediately accelerate its 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 over the prior fiscal year.

Zimmer Biomet expects the proposed transaction, considering the impact of financing, to be approximately 3% dilutive to adjusted earnings per share in 2025, about 1% dilutive to 2026 adjusted earnings per share and accretive to adjusted earnings per share within 24 months of deal close.

Zimmer Biomet said it plans to fund the proposed transaction through a combination of cash on the balance sheet and other available debt financing sources.

Closing of the proposed transaction is anticipated to close in the first half of 2025.