Zimmer Biomet Spin-off (Spine and Dental) Notes

March 18, 2022 Update

Good interview with Vafa Jamali CEO of ZimVie

  • ZimVie is projecting approximately $1b in revenue for 2022
  • The company is burdened with $561m in debt at the time of spin

February 15, 2022 Update

Good write up on the ZimVie spinoff

  • RemainCo will have a full divestment of ZimVie with 80.3% going to shareholders and 19.7% being IPOed

February 3, 2022 Update

Good overview on the ZimVie spin

  • The Dental and Spine (SpinCo) branches of Zimmer Biomet does not have as strong margin and growth profile as the RemainCo
  • ZimVie’s EBITDA fell from $153m in 2018 to $89m in 2020
  • During the same period, ZimVie’s margins fell from ~15% to 10%
  • There has been some rebound TTM EBITDA of $144m with 14% margin
  • The Dental and Spine market TAM combined are worth $21b which ZimVie will account for <5%
  • The SpinCo will be burdened with ~$555m in gross debt for almost 3.5x net leverage
  • This seems like a possible opportunity for indiscriminate selling depending on whether investors identify the SpinCo as a different industry and many investors may sell simply because of the smaller size

January 27, 2022 Update

Good key points on understanding the Zimmer Biomet spin, ZimVie

February 19, 2021 Update

  • Zimmer announced that it will spin off, ZimVie, its Spine and Dental businesses into an independent public company.
  • The tax free spin-off is supposed to be completed by mid 2022.
  • Spin-off Presentation.

  • Remainco:
    • Will have ~$6.1BN in revenue.
    • Market leader in knees and hips.

  • Spin-off
    • $900MM in 2020 revenue.
    • Focused on Spine (#6 in the market) and Dental (#5 in the market)
    • Spine and Dental were paired together because they use similar materials.
    • Could be an interesting situation given size differential of spin-off vs. parent (could see indiscriminate selling).