The orthopedic and spine device field has exploded with merger and acquisition activity over the past few years, the most recent example being Zimmer’s acquisition of Biomet. Private equity owned Biomet, a strong player in the orthopedics field, was searching for a buyer in 2013 but came up empty-handed; then the capital markets changed in early 2014, prompting the company to pursue an initial public offering as an alternative exit route.
Within a few months, however, Zimmer made an offer Biomet couldn’t refuse. “I believe the Biomet executives filed for the IPO and left themselves open to the dual track process; they could choose between the best of both worlds, either doing an IPO or becoming acquired,” says Paul Teitelbaum, managing director and medical device/healthcare IT M&A expert at Mesirow Financial’s Investment Banking Group. “There have been other cases where companies were bought out after filing for an IPO. It does happen and the dual-track process is a frequent strategy.”