Zimmer Biomet Holdings (Zimmer Biomet) is to acquire LDR Holding Corporation (LDR) for £25.60 ($37) per share which equates to a total transaction value of £691m ($1bn)
LDR designs and commercialises technology that makes surgical procedures easier to perform and provides improved clinical outcomes in the treatment of spine disorders, according to Zimmer Biomet, a company focussed on musculoskeletal healthcare.
The addition of LDR will bolster Zimmer Biomet's presence in the global spine market and according to the company, will provide them with an immediate and a leading position in the fast growing cervical disc replacement (CDR) and MIS segments.
Zimmer Biomet said it expects the acquisition to accelerate growth of its spine business through entry into the cervical disc replacement market and cross-portfolio selling opportunities to both Zimmer Biomet and LDR customer bases.
David Dvorak, president and CEO of Zimmer Biomet, 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."
Christophe Lavigne, co-founder, chairman, president and CEO of LDR, said: "We are delighted with this combination, which will further our commitment to improving spine care by providing greater access to our innovative product offerings for patients around the world.”
Zimmer Biomet said it plans to finance the transaction using cash balances on hand and existing availability under its revolving credit facility and expects to maintain an investment grade profile.
Following consummation of the transaction, Zimmer Biomet plans to issue £518m ($750m) of senior unsecured notes, the proceeds of which will be used to repay the credit facility. Zimmer Biomet intends to maintain its previously discussed deleveraging strategy.
The transaction is subject to customary closing conditions and is expected to close in the third quarter of 2016.