Zimmer to buy Biomet amid flurry of billion-dollar medical deals
Orthopedic products maker Zimmer Holdings on Thursday announced it will acquire Biomet Inc. in a deal valued at $13.35 billion, including assumption of debt, the companies said.
The proposed acquisition follows a flurry of billion-dollar deals by pharmaceutical and medical device companies.
PHOTOS: Best and worst countries to grow old in
This week Swiss multinational company Novartis AG, maker of Excedrin, announced a restructuring of its businesses with GlaxoSmithKline that included the sale of GSK’s oncology products to Novartis for $14.5 billion. Activist investor Bill Ackman and Canadian firm Valeant Pharmaceuticals International Inc. on Tuesday unveiled details of their $45-billion bid for Irvine pharmaceutical company Allergan Inc., which makes the popular Botox wrinkle treatment.
The acquisition of Biomet is expected to close in the first quarter of 2015. The two companies reported revenues that combined totaled $7.8 billion in 2013. The consolidated company is projected to have cost savings of $270 million by the third year following the transaction’s close.
News of the the acquisition boosted Zimmer Holdings’ shares. The company’s stock was up $13.06, or 14.28%, to $104.51 on Thursday morning.
“The transaction positions the combined company as a leader in the musculoskeletal industry with a broad portfolio of products, technologies and services, enabling us to help shape how solutions are developed and delivered,” said David Dvorak, Zimmer’s chief executive, in a statement. “We believe that current demographic and macroeconomic trends affecting the healthcare industry will reward companies that successfully partner with other key stakeholders to improve patient care in a cost-effective manner.”
The transaction will be paid for with a combination of cash and common stock, the Indiana company said. Zimmer will pay $10.35 billion in cash and the remaining will be paid for in stocks.
Founded in 1927, Zimmer specializes in orthopedic, dental and surgical devices and products. It reported sales of more than $4.6 billion in 2013.
