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Within two hours on Tuesday, Stryker announced the proposed divestiture of its spine business and Zimmer Biomet revealed an agreement to acquire Paragon 28 — activities that shake up two of the largest players in orthopedics.
Let’s break down what we know.
Stryker Sells Spine Implant Business
Stryker reached an agreement to sell its U.S. and France spinal implant business to Viscogliosi Brothers to create VB Spine. The transaction is expected to close within 1H25 and precede the sale of Stryker’s spinal implant businesses in other international markets.
ORTHOWORLD estimates that Stryker will divest global assets that reached about $700 million in sales in 2024.
Once the deal is finalized, VB Spine will become a strategic partner to Stryker and have exclusive access to Mako Spine and Copilot, enabling technology systems that received market clearance in 2024 and were expected to be integral to the growth of Stryker’s spine business.
“We believe that the spinal implants business, with its comprehensive portfolio and strong sales channel, will thrive as an independent company,” said Kevin Lobo, Chair and CEO of Stryker. “With dedicated resources and a focused strategy, the business will be well positioned to succeed as part of Viscogliosi Brothers.”
The divestiture makes sense for Stryker, said Mike Evers, ORTHOWORLD Senior Market Analyst. Like Zimmer Biomet before it, Stryker discovered a lack of synergy between its spine and orthopedic franchises. Recent market consolidation also made Stryker a distant third player in the spine market with an implant business that couldn’t match the innovation cadence of two of its main competitors: Medtronic and Globus Medical.
In early January, Stryker announced the $4.9 billion acquisition of Inari, a peripheral vascular company that operates in the venous thromboembolism market. Stryker’s exit from spine allows it to reallocate focus and resources into higher-growth areas inside and outside of orthopedics, and hands a significantly sized business to well-known players in the market.
Since its founding in 1999, Viscogliosi Brothers has started, financed and operated 42 businesses across more than 80 countries. Its notable spine investments include Spine Solutions, Spine Next, Paradigm Spine, Simplify Medical, Centinel Spine, Companion Spine, Spine BioPharma and Woven Orthopedics Technologies.
“We have long admired Stryker for its comprehensive spine portfolio, incredible talent and strong culture,” said Marc, John and Anthony Viscogliosi, Co-Founders of Viscogliosi Brothers. “We see a tremendous opportunity to provide the focus, surgeon-centric innovation and commercial execution needed to grow the business and further impact patient lives and outcomes.”
Zimmer Biomet to Acquire Paragon 28
Zimmer Biomet agreed to acquire Paragon 28 for an enterprise value of roughly $1.2 billion. The transaction is slated to close within 1H25.
Zimmer Biomet’s foot and ankle business accounted for just 4% or about $70 million of its sports medicine, extremities and trauma (S.E.T.) business at the end of 2023. The proposed transaction is expected to immediately accelerate Zimmer Biomet’s revenue growth. Paragon 28 announced 2024 net revenue in a range of $255.9 to $256.2 million, representing 18% reported growth over 2023.
Paragon 28 offers a suite of surgical and product systems spanning all major foot and ankle segments, including fracture and trauma, deformity correction, joint replacement and enabling technology. The acquisition supercharges Zimmer Biomet’s foot and ankle portfolio and provides a stable platform in a high-growth market.
Evers said that Zimmer Biomet’s S.E.T. business faced myriad challenges in recent years, from volume-based procurement in China to supply problems. If Zimmer Biomet can avoid diluting or blunting the strength of Paragon 28 during the integration, the acquisition can be a major coup for the third-largest player in orthopedics.
“This proposed transaction further diversifies Zimmer Biomet’s portfolio outside of core orthopedics 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,” said Ivan Tornos, President and CEO of Zimmer Biomet. “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.”
The largest orthopedic companies have grown their foot and ankle market share by adding focused players. Stryker acquired Artelon and 4WEB Medical’s trauma portfolio in 2024. Enovis acquired Novastep, DNE, MedShape and Trilliant Surgical between 2021 and 2023. DePuy Synthes (now Johnson & Johnson MedTech) acquired CrossRoads Extremity Systems in 2022. Smaller companies in the space will likely remain acquisition targets for some time.
Paragon 28 was founded in 2010, went public in 2021 and is the largest company solely focused on foot and ankle, according to ORTHOWORLD estimates.
“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,” said Albert DaCosta, Chairman and CEO of Paragon 28. “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.”
M&A in 2025
Orthopedics saw an extremely low level of M&A in 2024, despite executives at large companies saying activity would remain aggressive. It’s possible that deals took longer than expected to close, and we’ll see more acquisitions in 2025.
“We do have a very active deal pipeline and we’ll continue to be active,” Lobo said in mid-2024. “It’s always hard to predict exactly which deals will land, but we have a very strong balance sheet, which we’re going to put to work.”
Our historical tracking of orthopedic M&A data shows that in the last 10 years, Stryker and Zimmer Biomet have completed the most acquisitions, while the top segments of focus have been enabling technology, spine and trauma.
