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US-based medical technology company Zimmer Biomet has agreed to acquire Paragon 28 for an equity value of around $1.1bn and an enterprise value of up to $1.2bn.
Paragon 28 is a medical device company focused on the foot and ankle orthopaedic care.
Under the terms of the agreement, Zimmer Biomet will acquire all outstanding shares of Paragon 28 for an upfront payment of $13 per share in cash.
Paragon 28 shareholders will also receive a non-tradeable contingent value right (CVR), which allows the holders to receive up to $1 per share in cash.
Zimmer Biomet will make the CVR payments in whole or in part if its net sales exceed $346m up to $361m during fiscal year 2026.
Boards of directors of both parties unanimously approved the proposed transaction.
The transaction is expected to be completed in the first half of 2025, subject to regulatory approvals, approval by Paragon 28 stockholders and other customary closing conditions.
Zimmer Biomet intends to fund the transaction through a combination of cash on the balance sheet and other available debt financing sources.
Zimmer Biomet president and CEO Ivan Tornos said: “This proposed transaction further diversifies Zimmer Biomet’s portfolio outside of core orthopaedics and positions us well in one of the highest growth specialized segments in musculoskeletal care, while creating cross-selling opportunities in the rapidly growing ASC space.
“Paragon 28’s broad and innovative foot and ankle portfolio, robust product pipeline and dedicated and highly trained sales force, combined with Zimmer Biomet’s global reach and capabilities, will uniquely position us to address the unmet patient needs of this highly complex anatomy.”
Established in 2010, Paragon 28 offers surgical solutions and product systems for foot and ankle care, including fracture and trauma, deformity correction and joint replacement.
The company has been focused on bringing to market advanced solutions to address areas of unmet need in the foot and ankle segment.
Zimmer Biomet said that the acquisition will expand its foot and ankle offerings, while strengthening its existing fracture and trauma and joint replacement portfolios.
Paragon 28’s portfolio will complement Zimmer Biomet’s footprint and existing infrastructure, which is expected to drive adoption and advance growth in the US and beyond.
Also, the acquisition will advance Zimmer Biomet’s WAMGR strategy and facilitate penetration into the growing ambulatory surgery centre (ASC) space.
Goldman Sachs & Co. served as exclusive financial advisor and Hogan Lovells US as legal advisor to Zimmer Biomet, on the transaction.
Piper Sandler & Co. served as exclusive financial advisor and Cravath, and Swaine & Moore served as legal advisor to Paragon 28.
Paragon 28 chairman and CEO Albert DaCosta said: “We are incredibly proud of the legacy we have built at Paragon 28 as an industry leader committed to continuously improving the outcomes and experiences of patients suffering from foot and ankle conditions.
“Joining Zimmer Biomet is an exciting new chapter for Paragon 28 and an incredible opportunity to advance our mission and continue to deliver groundbreaking solutions in the foot and ankle segment.”