Zimmer Biomet Holdings, Inc. (NYSE: ZBH), a global leader in medical technology, has announced a definitive agreement to acquire Paragon 28, Inc. (NYSE: FNA), a specialized medical device company focused on foot and ankle orthopedics. This acquisition, valued at approximately $1.2 billion, underscores Zimmer Biomet’s commitment to expanding into higher-growth market segments within musculoskeletal care.
Under the agreement, Zimmer Biomet will acquire all outstanding shares of Paragon 28’s common stock for $13.00 per share in cash, equating to an equity value of approximately $1.1 billion. Additionally, Paragon 28 shareholders will receive a contingent value right (CVR), allowing them to earn up to $1.00 per share in cash if specific revenue milestones are met. The CVR payout will depend on Paragon 28’s net sales performance in Zimmer Biomet’s fiscal year 2026, with payments ranging from $0.00 to $1.00 per share for sales between $346 million and $361 million.
The transaction has been unanimously approved by the boards of both companies and is expected to close in the first half of 2025, pending regulatory approvals and shareholder consent.
Zimmer Biomet’s acquisition of Paragon 28 aligns with its strategy of diversifying beyond core orthopedics into high-growth specialized markets. The global foot and ankle orthopedic segment is valued at approximately $5 billion and is growing at a high-single-digit rate annually.
“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,” said Ivan Tornos, President and CEO of Zimmer Biomet. “Paragon 28’s innovative portfolio, strong pipeline, and specialized sales force, combined with Zimmer Biomet’s global scale, will allow us to better serve patients with foot and ankle conditions.”
Paragon 28, established in 2010, has built an extensive suite of surgical solutions for fractures, trauma, deformity correction, and joint replacement within the foot and ankle segment. This deal will enable Zimmer Biomet to integrate Paragon 28’s specialized expertise with its existing product portfolio, creating new cross-selling opportunities, particularly in the fast-growing ambulatory surgical center (ASC) sector.
Paragon 28 reported an 18.4% year-over-year revenue increase in 2024, with full-year revenue ranging between $255.9 million and $256.2 million. Zimmer Biomet expects the acquisition to be immediately accretive to revenue growth. While it will be slightly dilutive to adjusted earnings per share (EPS) in 2025 and 2026, the deal is projected to become accretive within 24 months of closing.
Zimmer Biomet will finance the acquisition through a mix of cash on hand and available debt facilities. Despite the investment, the company aims to maintain a strong balance sheet and continue executing its capital allocation priorities.
The acquisition of Paragon 28 positions Zimmer Biomet as a major player in the foot and ankle segment, complementing its broader musculoskeletal product offerings. With regulatory approvals and shareholder consent expected in the coming months, the deal marks a strategic milestone for Zimmer Biomet’s growth trajectory in specialized orthopedic care.