ZimVie Sells Spine Business, Becomes Pure-Play Dental Company

ZimVie has announced the sale of its spine business to investment firm H.I.G. Capital, causing its shares to surge by more than 50% to $17.05 per share by the same afternoon. This decision positions ZimVie as a pure-play dental company, streamlining its operations and intensifying its focus on dental markets. The MassDevice MedTech 100 Index experienced a slight uptick in response to this development.

The Deal Details: $375 Million Transaction

The sale of the spine business, valued at $375 million, comprises $315 million in cash and a $60 million promissory note accruing interest at a rate of 10% per annum. 

ZimVie’s board of directors has greenlit the transaction, anticipating its completion in the first half of 2024. The company plans to utilize the after-tax proceeds to reduce debt, with expectations of a positive impact on revenue growth, EBITDA margin, and cash flow.

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President and CEO Vafa Jamali emphasized that the sale includes the core spine, motion preservation, and EBI bone healing portfolio and services. This move is intended to create a leaner, more focused ZimVie with a leading position in the globally expanding dental markets. 

The company aims to leverage the capital from the transaction to fuel growth in its dental commercial and innovation platforms while reducing its leverage profile.

Management Continuity and Recent Developments

H.I.G. Capital intends to support the existing management of the spine organization, with ZimVie Global Spine President Rebecca Whitney continuing as the president of Spine in the new company. 

Recent regulatory developments, including FDA clearance for the Vital spinal fixation system, showcase the strength of ZimVie’s spine business. The company plans a refresh of its core spinal fusion line to further enhance its product offerings.

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Analyst David Saxon from Needham & Co. views the sale of the spine business as a positive step, noting the challenges faced by ZimVie’s spine division in contrast to the solid footing of its dental business. ZimVie’s leadership, including Rebecca Whitney, looks forward to building on the company’s strong foundation in the dental sector.

Partnership with H.I.G. Capital

Mike Gallagher, Managing Director at H.I.G. Capital, expresses confidence in the spine business’s foundation, highlighting its market-leading portfolio, surgeon satisfaction, and positive patient outcomes. 

The collaboration aims to create an innovation engine for distributors, surgeons, and patients, leveraging H.I.G.’s expertise in the medical device space alongside ZimVie’s spine management capabilities.