Zimmer to spin off spine and dental business

MedTech News: Zimmer Biomet announced its intention to spin off the company’s Spine and Dental businesses to form a new and independent, publicly traded company (“NewCo”). The planned transaction will enhance the focus of both Zimmer Biomet and NewCo to meet the needs of patients and customers.

The COVID-19 impact saw Zimmer Biomet’s full-year sales decline by 12% to approximately $7 billion with the bulk of the decline from the Asia Pacific region.

“As part of the third phase of Zimmer Biomet’s ongoing transformation, we are changing the complexion of our business through active portfolio management in order to accelerate growth and drive value creation,” said Bryan Hanson, President and CEO of Zimmer Biomet.  

“For Zimmer Biomet, the transaction is an important step toward shifting our portfolio mix to higher-growth markets where we have a clear path to leadership and right to win. We believe NewCo will thrive as an independent company with prioritised capital allocation to pursue strategic growth opportunities and investment strategies in the large and growing Spine and Dental markets,” he added.

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Following the spin-off, Zimmer Biomet will remain a leader in attractive segments within the orthopaedic market, including Knees, Hips, Sports Medicine, Extremities and Trauma (S.E.T.), and Craniomaxillofacial and Thoracic (CMFT). With a total market of $43.5 billion, the company has significant opportunities to capture growth and market share.  

NewCo will be well-positioned in the $21 billion combined global Spine and Dental markets that benefit from attractive fundamentals. The Spine portfolio addresses all areas of spinal surgery, with enabling technologies to drive pull-through of core spine sales. The most differentiated products include ROSA ONE Spine, Mobi-C Cervical Disc and The Tether.  

The Dental business is a global leader in oral reconstruction and is well-positioned in premium segments of the dental market, including surgical, restorative and digital, and regenerative solutions.  

Bryan Hanson will continue to lead Zimmer Biomet as its President and CEO. The search for a NewCo CEO is in its final stages. The NewCo Board of Directors, management and headquarters will be announced as they are finalised.

Zimmer Biomet is targeting completion of the spin-off in mid-2022.