Warsaw-based Zimmer Biomet Holdings Inc. (NYSE: ZBH) has announced plans to spin off its spine and dental businesses to form a new and independent, publicly-traded company. The medical device manufacturer says NewCo is expected to achieve faster growth and deliver greater value for stakeholders.
The company says the transaction will enhance the focus of both Zimmer Biomet and NewCo to meet the needs of patients and customers.
“As part of the third phase of ZB’s ongoing transformation, we are changing the complexion of our business through active portfolio management in order to accelerate growth and drive value creation,” said Bryan Hanson, president Zimmer Biomet. “For Zimmer Biomet, the transaction is an important step toward shifting our portfolio mix to higher-growth markets where we have a clear path to leadership and right to win.”
The company says NewCo is expected to create value for all stakeholders by meeting key goals:
- Create a stronger growth profile for each company with enhanced management focus, while better aligning resources and processes more directly with the strategic priorities of each business
- Improve capital allocation based on the objectives of each independent company
- Reduce complexity and improve operating efficiencies
- Provide each company with a compelling financial profile that more accurately reflects the strengths and opportunities of each business and as a result, offers investors a more targeted investment opportunity.
“We believe NewCo will thrive as an independent company with prioritized capital allocation to pursue strategic growth opportunities and investment strategies in the large and growing Spine and Dental markets,” continued Hanson. “This planned transaction underscores our commitment to ensuring our long-term priorities remain aligned with shareholders’ best interests as we drive the business forward to meet customer needs and advance our mission to alleviate pain and improve the quality of life for people around the world.”
Zimmer says the search for a NewCo CEO is in its final stages, and the NewCo board of directors, management and headquarters will be announced when they are finalized.
Zimmer is hoping to complete the spin-off in mid-2022.