ZimVie will sell its spine business for $375 million to investment firm HIG Capital, becoming a dental-only company.
The funds from the deal, which is expected to close in the first half of 2024, will be used to reduce debt. Also, the deal is expected to be accretive to ZimVie’s revenue growth rate; earnings before interest, taxes, and depreciation margin; and cash flow conversion rate by allowing the company to streamline its operations and sharpen its focus as a dental company.
Under the terms of the agreement, upon the closing of the transaction, ZimVie will receive $375 million in total consideration comprised of $315 million in cash, subject to certain customary adjustments as set forth in the agreement. Additionally, there will be $60 million in the form of a promissory note that will accrue interest at a rate of 10% annually, compounded semiannually, payable in kind. The transaction has already been approved by ZimVie’s board of directors.