Zimmer acquires Biomet for 13.3 Billion

Biomet is looking like the Cadillac Reps here and Zimmer Reps, the red headed step child. Sorry, its true

 

Interesting buy out, sure there won't be any questions concerning reps integrity when they start selling products they were slagging off a month ago.
Anyone remember the acrmonious JBJS advertisements concerning the Oxford Knee? Lets wait for the U turn on it's clinical results being great!

 

LOL..sorry bro.. this new phone is killing me. Yes, I meant candor.

 

Why would they push the Oxford when they're already having success with the ZUK?

 

I wrote that entirely in jest (may I never, ever 'flounce')….actually get quite annoyed at the spelling police that seek to discredit the point because a letter got left out.

Canter on….

 

I'm sure the Zuk will be sold off. Oxford has much more market share and far more loyal following. Same with shoulder.

 

Who is going to buy the ZUK and shoulder Einstein?

 

Those of us that remember the centerpulse acquisition in 03 or Abbott spine will know that Zimmer favors their own designs to others. Biomet's portfolio won't get the same focus going forward. How does the same company tout two different brands of vit E poly? Ans: one gets ignored. The ZUK and the oxford might do okay because they're different enough from each other to both have value to different surgeons, but the Oxford won't get the singular focus it has enjoyed and won't be used as a door opener to the degree that it has in the past.

The total knee systems have a lot of overlap. They'll want to keep both sales forces around to service the same volume they always have. The warehouses will be combined and some distributors will lose out, but the average rep may do fine for several years. The real "savings" will come from 2 legal departments, purchasing, manufacturing, contracts, management from the director up, quality, sterilization, lab work etc.

Anything in the pipeline that is redundant will be re-evaluated with a new eye. Do I need a new baseplate for the vanguard or can I make a crossover poly to allow the use of persona femurs with vanguard baseplates. Hmmm this is fun. I probably don't need the new instrument set for the vanguard femurs that was being developed in response to the persona instruments so with these crossover polys. I could eliminate a few engineers with that change. And so on...

 

I'm not saying your whole post is wrong, but manufacturing, quality, and sterilization scale at different enough rates from the other functions you listed. Neither of these org's have machines sitting idle and outsource a lot of work... Legal, contracts, research - yea, those are easy. The others scale differently, maybe only every other person gets cut from one of the org's.

 

Lots of people in Warsaw will be cut from both companies. Now we will have even more homegrown Warsaw people. If you are not related to a bunch of people in both companies you might as well start looking for a job. Really sad....

 

Heard people less than 3 years tenure at either company are as good as gone. Start kissing up.

 

more like bottom 5% gone like zimmer historically does, or shall we say with the merger up to bottom 10% at least. lots of synergies here from the merger. nice to be able to pick from the best and most loyal workers at both companies. best in industry for each combined department now; why wouldn't this competitive powerhouse select the best and brightest. those who left either on bad terms will have tough time (more so for Z to B, rather than B to Z). for company future looks bright. good luck to us all...

 

It will be interesting to see how changes in our industry effect Warsaw, Indiana, given the ortho concentration. These changes are consistent with what our customers are facing as well (hospital system expansion, hospital owned physicians, super-group surgeon practices, etc). While it will take years to see what finally shakes out, the people of Warsaw, Indiana are resilient, will confront this change and move forward.
25% of US jobs in the 1930's were farming; today, farming is around 2%. Yet no one suggests we go back to 25% of all workers farm. US Motor Vehicle Industry jobs peaked in 2000 at nearly 1.3 million workers and the US Auto Industry lost nearly half of those jobs by 2008 with most of those jobs being moved off shore.....sound familiar?
The people of Warsaw are strong and will get through this. Some will leave town to find new jobs, others will stay. It will take time to sort out.

If you want and interesting read, check out this article on the decline of US Manufacturing Jobs. While the article is a macro US view, points in the article speak of the potential impact to jobs in Warsaw, Indiana.

http://economics.yale.edu/sites/default/files/schott-09-oct-2013.pdf

 

Antitrust

A lot of people seem to think ZMH's BMET acquisition is a done deal. Why? What about antitrust considerations especially in the USA, UK, Spain, Germany, Italy, France, Canada, Mexico, Brazil, etc?

 

Re: Antitrust

You sound like your scared...

 

In my opinion this merger will be devastating for the city of Warsaw. The consolidation will take years and won't be announced day one. As time goes by there will be losses by both Biomet and Zimmer employees...both in Warsaw and in the field. The short term (2 yr) impact for Warsaw will be considerable. Lots of homes on the market, home prices dropping, retail business will have less revenue, car and boat sales will slow down, etc and etc. People will be forced to either take lower paying non-ortho jobs or will move away, never to return. The total impact will be fewer workers at all salary/hourly levels....nobody is protected, regardless of how hard you worked or how well you did your job. Not good for the hard working folks who have dedicated their lives a for companies that simply will not care. Very sad to see a great, innovative company like Biomet disappear. Sorry to be pessimistic but this has been repeated over and over in many other industries, why would orthopedics be any different?

 

Sad but true.Very sad.

 

Re: Antitrust

The purpose of "antitrust considerations" is to make sure nothing illegal was done, and that the public (the masses) are presented a 'comfortable explanation' that will prevent revolution and panic and DIS-trust of the 'system'. (granted, a slightly dramatic analogy)

This deal is 'done'. Now plan (as best you can, given this very early point in the process) your future taking the 'done-ness' into consideration, again, as best you can, given only the few details that will be distributed over the next 9-16 months, due to the required self-preservation of the two separate corporations.

Here is just a GLIMPSE of the sophistication and intelligence that went into this deal, via an article posted on the Biomet thread (mind-blowing stuff) ;



Excerpt from an Article about the New York Times about this deal. The link to the complete article is below but not necessary to read entire story:

"Morgenson identifies an even more dubious fee practice early in her article, that of managing to get paid for services never performed. She discusses the sale of Biomet, a Warsaw, Indiana- based company sold by a Blackstone-led consortium for $13.4 billion, which included a $2 billion profit. But the carried interest and the transaction fees weren't all the general partners got out of this deal:
But for Blackstone and the other private-equity partnerships in the deal — overseen by Goldman Sachs, Kohlberg Kravis Roberts and TPG Capital — this deal will be a gift that keeps giving. That's because, beyond the profits they share with their clients, they will be paid millions more in fees — for work that they are never going to do.
In addition to a 20 percent share of gains from the sale, as well as management fees of 1.5 percent to 2 percent charged to investors, the private equity firms will also share in an estimated $30 million in "monitoring fees." These fees were to be charged through 2017, but given that the deal is expected to close early next year, Blackstone, Goldman Sachs, K.K.R. and TPG will be paid for two years of services that Biomet isn't receiving.


http://truth-out.org/news/item/23984-new-york-times-new-editor-buries-important-story-on-private-equity-fee-shenanigans-on-holiday-weekend

 

Zimmer + Biomet minus Dave D (times up) = GE Acquisition -