Spinouts beget spinouts with the final sale of ZimVie’s spine business to the investment firm H.I.G. Capital.
First announced last December, the $375 million deal will see the launch of an independent, Colorado-based maker of screw and plate implants, fixation systems and bone healing technologies, among other spine products, under the new banner Highridge Medical.
“Highridge has a robust foundation of spine solutions supported by extensive clinical evidence and patient outcomes to build upon,” Highridge CEO Glen Kashuba said in a statement.
“The company is committed to improving spine care by investing in R&D, product innovation and introducing additional product offerings to restore mobility and alleviate pain for patients around the world,” Kashuba added. “We believe our partnership with H.I.G. to create the largest privately held spine business in the industry will generate lasting benefits for distributors, surgeons and patients.”
ZimVie, meanwhile, first got its start just over two years ago as the new home for the combined spine and dental divisions of Zimmer Biomet. It will continue on as a pure-play business focused on denture implants, biomaterial grafts and digital services for dentistry providers and has relocated its global headquarters to Palm Beach Gardens, Florida.
“The completion of the sale of our spine business is the culmination of months of partnership with H.I.G. Capital and years of commitment from our global spine team members; I would like to thank everyone for their immense contributions,” said ZimVie President and CEO Vafa Jamali. “I could not be more excited for the future of our company as we continue to invest in differentiated solutions for dental patients and providers in our most attractive end markets, while optimizing our structure to deliver value for our shareholders.”
The handoff will see ZimVie receive $315 million in cash plus a $60 million promissory note. The company said it plans to immediately pay down $275 million in debt, leaving about $234 million remaining on its balance sheet. Going forward, it has forecast at least $455 million in annual net sales from its dental offerings.
In its full-year 2023 earnings presentation in late February, ZimVie reported $409.2 million in sales from “discontinued operations,” which included the departing spine business, representing a 9% decrease from the year before. That category also logged a net loss of $337.2 million, counting a $289.5 million write-down of the spine group to fair value, the company said. The division’s total adjusted net income was pegged at $12.7 million, down from $19.3 million in 2022.
At Highridge, Rebecca Whitney will continue in the role of president while Eric Major, the founder and former CEO of K2M Group Holdings, will serve as executive chairman of the board. Chris O’Connell, former group president at Medtronic and CEO of Waters Corporation, will also join the board.