US medical device maker Zimmer to buy Biomet for $13.35 bn

US medical device maker Zimmer Holdings Inc today struck a deal to buy orthopedic products company Biomet Inc in a $13.35 billion cash and stock deal, including debt, in order to become the leader in the $45 billion musculoskeletal (locomotor system) industry.

Under the terms of the friendly deal, Zimmer will pay $10.35 billion in cash and stock worth $3 billion.

Indiana-based Zimmer said that it will fund the cash portion through existing cash on hand, as well as proceeds obtained from a newly committed $3 billion senior unsecured term loan and newly issued senior notes.

Biomet was taken private in 2007 for $11.4 billion by a private equity consortium including Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co and TPG Capital.

Zimmer said that given the complementary nature of the portfolios, the combined company will offer a greater depth and breadth of musculoskeletal solutions and enhance enterprise diversification in the knee, hip, surgical, spine and dental categories, as well as in the fast-growing sports medicine, extremities and trauma categories.

Biomet designs, manufactures and markets surgical and non-surgical products used primarily by orthopedic surgeons and other musculoskeletal medical specialists.

Its product portfolio includes hip and knee reconstructive products; sports medicine, extremities and trauma products; spine, bone healing and microfixation products; dental reconstructive products; and cement, biologics and other products.

Zimmer, a 2001 spin off from Bristol-Myers Squibb, makes orthopaedic reconstructive, spinal and trauma devices, dental implants, and related surgical products. It has operations in more than 25 countries and sells products in more than 100 countries.

Zimmer has 9,000 employees worldwide and 2013 sales of $4.6 billion.