Leading player in the musculoskeletal space – Zimmer Holdings, Inc. (ZMH) – recently disclosed that it has acquired Massachusetts-based ETEX Holdings, Incorporated in a bid to expand its Biologics portfolio. However, the financial terms of the deal were not revealed.
According to Zimmer, the addition of ETEX's Beta-bsm (Injectable), CarriGen, EquivaBone (including DBM), and Gamma-bsm (Putty) bone void filler products will enhance its Biologics portfolio of differentiated treatments. The company believes ETEX's bone substitute material products will help Zimmer advance further in the field of early stages of joint diseases.
ETEX currently provides calcium phosphate-based biomaterials useful for advanced orthopedic clinical outcomes. As a leading provider of bioresorbable bone substitute materials, the company currently focuses on Dosuk Lee's vision of providing clinical solutions. This technology in biomimetic calcium phosphate imitates the chemical and structural features of human bone and promotes natural bone regeneration.
Zimmer is committed to making strategic acquisitions to drive growth. One worth mentioning in this regard is the grand $13.35 billion acquisition of Biomet, announced in April this year. With this takeover, Zimmer plans to create a market leader in the $45 billion musculoskeletal industry thereby improving the merged entity's position in the competitive niche. According to the company, post-merger, this combined entity will provide significant benefits to patients, providers and healthcare stakeholders. The merged entity will successfully advance innovation and help create a more diversified and predictable revenue mix consistent with the comprehensive portfolio.
The company believes the Biomet acquisition will be perfectly in line with its strategic framework that focuses on growth, operational excellence and prudent capital allocation. Together, the new entity will be more competitive in knee and hip franchises with a more diverse revenue base to increase scale and capture faster-growing markets in adjacent categories. Moreover, Zimmer expects enormous financial benefits from this takeover.
Currently, Zimmer carries a Zacks Rank #4 (Sell). However, medical products companies such as Abaxis, Inc. (ABAX), Alere Inc. (ALR) and ResMed Inc. (RMD) are worth considering. All the three stocks hold a Zacks Rank #2 (Buy).
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