Zimmer Holdings will acquire Biomet in a cash and stock transaction valued at approximately $13.35 billion, including the assumption of net debt. The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close in the first quarter of 2015.

David Dvorak, Zimmer president and CEO, said, "We believe that current demographic and macroeconomic trends affecting the healthcare industry will reward companies that successfully partner with other key stakeholders to improve patient care in a cost-effective manner. Together with Biomet we will expand the scope of our innovation programs and will enhance our efforts to provide integrated services and comprehensive solutions that address the needs of our customers. At the same time, we believe that this merger will further support our long-term growth and stockholder value creation strategies."

The 2013 combined calendar year revenues of Zimmer and Biomet total approximately $7.8 billion, with combined adjusted EBITDA of $2.8 billion. The transaction is expected to be double-digit accretive to Zimmer's adjusted diluted earnings per share in the first year following the closing. Zimmer also expects to achieve net annual synergies of approximately $270 million by the third year following the closing of the transaction, with approximately $135 million anticipated in the first year. In addition, Zimmer expects the strong cash flow to enhance the combined company's future financial flexibility and allow Zimmer to maintain a stable dividend of 15% to 20% of net income following the closing of the transaction. 

The combined company will continue to be headquartered in Warsaw, Ind., maintain regional offices around the world and is anticipated to preserve a long-term commitment to its talented team members. David Dvorak will be president and CEO of the combined company. Two representatives of Biomet's principal stockholders will join the combined company's board, which will be expanded accordingly. Zimmer and Biomet will conduct business under a consolidated name that will leverage the strengths of both brands.  

At closing, Zimmer stockholders are expected to own approximately 84% of the combined company, and Biomet shareholders are expected to own approximately 16%.