Zimmer Holdings announced Thursday that it will acquire Biomet in a $13.5 billion transaction that will provide it with a leading position in the $45 billion musculoskeletal industry.
The merger between the two Warsaw, IN–based orthopedic device makers is expected to close early next year pending customary closing conditions and regulatory approvals.
The $13.5 billion includes cash, stock, and the assumption of debt.
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Zimmer officials see enhanced innovation and cross-selling opportunities from the acquisition. Cash flows from operations are expected to increase by 1.5 times Zimmer's stand-alone estimates.
"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. … This combination is about achieving growth and cultivating best-in-class solutions," David Dvorak, Zimmer president and CEO, said in a news release.
Dvorak also said: "We are equally committed to delivering quality products and outstanding clinical results and to legal and ethical behavior in the markets where we do business. And as companies focused almost exclusively in the musculoskeletal industry, we are passionate about orthopaedics and the related medical technology markets that we serve."