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Investing.com -- Zimmer Biomet announced that it plans to acquire Paragon 28, a medical device company, for approximately $1.1 billion. This acquisition is part of Zimmer’s strategy to expand its orthopedic surgical devices portfolio.
The acquisition will provide Zimmer Biomet with access to Paragon’s surgical implants and equipment, which are primarily used for treating foot and ankle ailments. Additionally, the deal is expected to strengthen Zimmer’s fracture and trauma, as well as joint replacement businesses.
As per the terms of the agreement, Zimmer Biomet will make an upfront payment of $13.00 per share in cash. This amount signifies an 8.3% premium to Paragon’s closing price on Tuesday.
Following the announcement, Paragon 28’s shares saw an increase of 9.3% in extended trading.
In addition to the upfront payment, Paragon stockholders will receive a non-tradeable contingent value right of up to $1 per share, based on certain achievements. This could potentially increase the total value of the deal to approximately $1.2 billion, according to Zimmer Biomet.
Zimmer Biomet has stated that it plans to fund the transaction through a combination of cash and debt financing. The company expects to finalize the deal in the first half of 2025.
The company also anticipates that the acquisition will result in a 3% dilution to its 2025 adjusted profit.
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