Zimmer Biomet Buys LDR Holding for $1 Billion

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Warsaw, Indiana-based Zimmer Biomet Holdings Inc.  recently announced it will purchase LDR Holding Corp. for approximately $1.0 billion.  PR Newswire notes that Zimmer Biomet will commence a tender offer to acquire all outstanding shares of LDR at a price of $37 per share, a 64% premium over LDR’s trading price prior to the announcement (however, as Bloomberg notes, LDR’s shares lost 49% in the last 12 months).  The companies expect to complete the transaction in the third quarter of 2016.

According to it’s website, Zimmer Biomet designs, manufactures, and markets orthopedic reconstructive products for musculoskeletal healthcare, including  knee, hip, surgical, spine, and dental franchises.  LDR describes itself as a global medical device company focused on the development of innovative technology for spinal procedures.

Zimmer Biomet’s 2015 annual report notes that the spine segment is one of the company’s smallest franchises, accounting for only about 7% of total sales.  Analysts predict Zimmer Biomet’s acquisition of LDR will increase the company’s share of the global spine market from about 5 to 7%, moving Zimmer Biomet from No. 6 to No. 5 in that sector.  Regarding the acquisition, David Dvorak, Zimmer Biomet President and CEO, said:

This highly strategic and complementary transaction will enhance Zimmer Biomet’s innovation leadership in musculoskeletal healthcare by adding a premier spine platform to our portfolio of solutions.

We are confident that the combination of Zimmer Biomet’s Spine division and LDR will create a Spine company with the scale, talent and technology portfolio to become a leader in the $10 billion global Spine market.

The LDR acquisition comes merely one year after Zimmer completed its combination with Biomet in a cash and equity transaction valued at over $14 billion.  At least some analysts believe that Zimmer Biomet’s purchase of LDR signals that the recently-combined company has wrapped up the integration and moved on to growing the company via M&A using its sizeable cash reserves.

Michael Burns
Michael Burns is an associate in the firm's Orange County office. Dr. Burns' practice focuses on patent prosecution for mechanical, medical device, and life science clients. Prior to joining the firm, Dr. Burns did post-doctoral research on cardiovascular systems. At the University of Chicago, Dr. Burns was awarded the Ruth L. Kirschstein National Research Service Award to study how oxygen affects blood vessel growth in the lung. At the Ohio State University, Dr. Burns designed and built a flow system for studying how best to restore blood flow after someone has suffered a heart attack. Dr. Burns worked as a summer associate at the firm in 2013 and joined the firm in 2014.
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