Zimmer Biomet to buy Paragon 28 for $1.1 billion

(Reuters) -Zimmer Biomet said on Tuesday it would acquire medical device company Paragon 28 for about $1.1 billion to expand its portfolio of orthopedic surgical devices.

The deal will give Zimmer Biomet access to Paragon's surgical implants and equipment used to treat foot and ankle ailments, while bolstering its fracture and trauma, and joint replacement businesses.

Under the terms of the deal, Zimmer Biomet will make an upfront payment of $13.00 per share in cash, which represents an 8.3% premium to Paragon's closing price on Tuesday.

Shares of Paragon 28 rose 9.3% in extended trading.

Paragon stockholders will also receive a non-tradeable contingent value right for up to $1 per share based on achievements, Zimmer said, potentially raising the deal value to around $1.2 billion.

Zimmer plans to fund the transaction through a combination of cash and debt financing and expects to close it in the first half of 2025.

It expects the deal to be about 3% dilutive to its 2025 adjusted profit.

(Reporting by Mariam Sunny in Bengaluru; Editing by Alan Barona)