Press Release

WARSAW — Zimmer Biomet Holdings, Inc., a global medical technology leader, and Paragon 28, Inc., a leading medical device company focused exclusively on the foot and ankle orthopedic segment, recently announced they have entered into a definitive agreement for Zimmer Biomet to acquire all outstanding shares of common stock of Paragon 28 for an upfront payment of $13 per share in cash, corresponding to an equity value of approximately $1.1 billion and an enterprise value of approximately $1.2 billion.

Paragon 28 shareholders will also receive a non-tradeable contingent value right 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 exceed $346 million up to $361 million (with the CVR payments calculated linearly between $0 and $1 if net sales are between $346 million and $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.

Established in 2010, Paragon 28 has an extensive suite of surgical offerings and product systems spanning all major foot and ankle segments, including fracture and trauma, deformity correction and joint replacement. Since its inception, Paragon 28 has been singularly focused on bringing to market innovative solutions to address areas of unmet need in the foot and ankle segment.

“This proposed transaction further diversifies Zimmer Biomet’s portfolio outside of core orthopedics 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. “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.”

“We are incredibly proud of the legacy we have built at Paragon 28 as an industry leader committed to continuously improving the outcomes and experiences of patients suffering from foot and ankle conditions,” said Albert DaCosta, chairman and CEO of Paragon 28. “Joining Zimmer Biomet is an exciting new chapter for Paragon 28 and an incredible opportunity to advance our mission and continue to deliver groundbreaking solutions in the foot and ankle segment.”

Benefits of the Proposed Transaction

• Strengthens and expands Zimmer Biomet’s foot and ankle offerings through Paragon 28’s leading technology platform while bolstering existing fracture and trauma and joint replacement portfolios.
• Complements Zimmer Biomet’s global footprint and existing infrastructure with Paragon 28’s expansive portfolio, which is expected to drive adoption and accelerate U.S. and international growth.
• Accelerates Zimmer Biomet’s WAMGR given significant opportunity across a ~$5 billion foot and ankle industry growing high-single digits.
• Expedites penetration opportunities in the fast-growing ASC space.

Proposed Transaction Highlights

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 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 two years of deal close.

Zimmer Biomet plans to fund the proposed transaction through a combination of cash on the balance sheet and other available debt financing sources. Zimmer Biomet expects to maintain a strong balance sheet and to continue to support its stated capital allocation priorities.

Closing of the proposed transaction is subject to receipt of required regulatory approvals, approval by Paragon 28 stockholders and other customary closing conditions, and is anticipated to close in the first half of 2025. Expected impacts to 2025 financial results will be discussed on Zimmer Biomet’s upcoming fourth quarter 2024 earnings call scheduled for Feb. 6.

Advisors

Goldman Sachs & Co. LLC is serving as exclusive financial advisor to Zimmer Biomet and Hogan Lovells US LLP is serving as legal advisor.

Piper Sandler & Co. is serving as exclusive financial advisor to Paragon 28 and Cravath, Swaine & Moore LLP is serving as legal advisor.