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Zimmer Biomet reached a definitive agreement to acquire Embody, a privately-held medical device company focused on soft tissue healing, for $155 million at closing and up to an additional $120 million subject to achieving future regulatory and commercial milestones over a three-year period. The acquisition is expected to be accretive to overall revenue growth and slightly dilutive to adjusted earnings per share in 2023.
Embody has developed an approach to tendon and ligament repair that involves collagen-based implants for soft tissue restoration and regeneration. The company employs a proprietary method to creating solutions through precise, controllable, scalable and novel additive manufacturing processes.
The acquisition includes Embody’s complete portfolio of collagen-based biointegrative solutions to support healing in orthopedic soft tissue injuries, including the TAPESTRY® biointegrative implant for tendon healing and TAPESTRY® RC, reportedly one of the first arthroscopic implant systems for rotator cuff repair.
“Embody’s differentiated products and innovative pipeline in the area of sports medicine support our continued focus on and investment in high-growth markets and underscores our commitment to bringing meaningful new advances to patients and surgeons,” said Bryan Hanson, Chairman, President and CEO of Zimmer Biomet. “The planned acquisition of Embody is an important step in the ongoing transformation of ZB and the execution of our strategic priority to increase long-term growth and drive value creation.”
The Embody transaction is a first step in the direction of growth for Zimmer Biomet’s sportsmed segment. In the company’s 3Q22 earnings call, Hanson remarked, “Phase 3 of our transformation is all around active portfolio management to transform the portfolio, shifting toward more accretive markets and diversifying our business. We look at mission centricity. We’ve got to make sure that we’re acquiring something that can move the mission. It would be faster growth areas outside of recon, but still in orthopedics and that would be mainly in our S.E.T. category. So that diversifies our business away from just recon in those faster-growth subcategories of orthopedics. I don’t want to say which of those we’re going to prioritize, but just know that all of those vectors are on the table and we’re looking at a number of assets in each of those categories.”
“We are excited for the potential to create value for patients and customers in new ways and believe the combination of Embody’s innovative products and Zimmer Biomet’s established portfolio will bring new solutions to the market that could redefine the standard of care,” said Jeff Conroy, Chief Executive Officer of Embody.
Source: Zimmer Biomet
