Zimmer Biomet announced that it plans to spin off its dental and spine businesses into a new company as it plans to focus on its musculoskeletal healthcare business going forward. The deal should be completed in mid-2021.
The move will allow Zimmer Biomet to focus its energy on the $43.5 billion orthopedics market, particularly the knees, hips, sports medicine, extremities and trauma, and craniomaxillofacial and thoracic segments. The company's current president and CEO, Bryan Hanson, will continue in these positions.
The spinoff is being called NewCo for the time being. Its offerings on the dental side include the company's T3 implant, its Tapered Screw-Vent implant system, its Trabecular Metal dental implant, its BellaTek Encode impression system, and its Puros allograft particulate.
In orthopedics, NewCo will also offer Zimmer Biomet's Rosa One Spine, a robotic and surgical navigation system; Mobi-C cervical disk, an alternative to spine fusion; and the Tether, an anterior vertebral body tethering system.
Zimmer Biomet estimates that the global dental and spine markets are worth $21 billion; its pro-forma estimates of NewCo's 2019 and 2020 revenues are $1 billion and $897 million. The search for a NewCo CEO is in its final stages, the company said.
In other news, the company posted decreased sales in its fourth-quarter and full-year financials (end-December 31, 2020), which it attributed to the COVID-19 pandemic. Its total fourth-quarter sales slipped 1.9%, compared with the same period in 2019, to $2.1 billion. However, during this period, sales in Zimmer Biomet's dental, spine, and craniomaxillofacial and thoracic businesses increased by 2.6% to $314 million.
For the year, the company's sales dipped 12% to $7 billion, a trend that also affected its full-year dental, spine, and craniomaxillofacial and thoracic business sales, which dropped 10.1% to $1 billion.
As for Zimmer Biomet's net earnings, for the fourth quarter the firm posted $333.7 million, while for the full year the company sustained a net loss of $138.9 million.
