Zacks Small Cap Analysis – MGRM: Monogram Applied sciences to be Acquired by Massive Medical Gadget Firm Zimmer Biomet Holdings – Buzz Credit score

By Thomas Kerr, CFA

Nasdaq: mgrm | NYSE:ZBH

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On July 14, 2025, Monogram (NASDAQ:MGRM) introduced they had been being acquired by main medical machine firm Zimmer Biomet (NYSE:ZBH). The next press launch was issued at the side of the announcement:

WARSAW, Indiana and AUSTIN, Texas, July 14, 2025 (GLOBE NEWSWIRE) — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH), a worldwide medical expertise chief, and Monogram Applied sciences Inc. (NASDAQ: MGRM), an orthopedic robotics firm, at present introduced they’ve entered right into a definitive settlement for Zimmer Biomet to amass all excellent shares of inventory of Monogram for an upfront cost of $4.04 per share in money, akin to an fairness worth of roughly $177 million and an enterprise worth of roughly $168 million. Monogram widespread stockholders may even obtain a non-tradeable contingent worth proper (CVR) entitling the holder to obtain as much as $12.37 per share of widespread inventory in money if sure product growth, regulatory and income milestones are achieved by 2030. The respective boards of administrators of Zimmer Biomet and Monogram have unanimously authorised the proposed transaction.

Monogram’s semi- and totally autonomous robotic applied sciences are anticipated so as to add new and differentiated capabilities to increase Zimmer Biomet’s flagship ROSA ® Robotics platform and broad suite of navigation and enabling applied sciences. Monogram has developed a CT-based, semi-autonomous, AI-navigated complete knee arthroplasty (TKA) robotic expertise, which acquired FDA 510(okay) clearance in March 2025 and is predicted to be commercialized with Zimmer Biomet implants in early 2027. Moreover, Monogram is growing a completely autonomous model of the expertise with the potential to considerably enhance security, effectivity and outcomes, in addition to further purposes past TKA. Upon closing of the proposed transaction, Zimmer Biomet expects to have a transparent pathway to turn out to be the primary and solely firm in orthopedics to supply a completely autonomous surgical robotic.

“Monogram’s expertise is a significant leap ahead, demonstrating our dedication to changing into the boldest and broadest innovator in surgical robotics and navigation,” stated Ivan Tornos, Chairman, President and Chief Govt Officer of Zimmer Biomet. “Upon closing, our customer-centric portfolio will encompass essentially the most complete and versatile expertise ecosystem to help the various preferences of an enormous array of surgeons – now and into the longer term. With Monogram’s proprietary expertise, Zimmer Biomet has the potential to turn out to be the primary firm to ship totally autonomous capabilities and redefine each the usual of care and the way forward for orthopedic surgical procedure.”

The proposed transaction expands Zimmer Biomet’s in depth suite of orthopedic robotics, enabling options and analytics to handle the wants of surgeons pre-, intra- and post-operatively. Zimmer Biomet’s broad portfolio options imageless robotics by its ROSA platform; a licensed CT-based handheld robotic; blended actuality navigation; AI-based surgical navigation; and a pathway to superior semi- and totally autonomous robotics capabilities. More and more, Zimmer Biomet is uniquely positioned to unravel for the various preferences of a variety of surgeons globally and handle a number of types of surgical strategies, akin to CT and non-CT; robotic and non-robotic; and guide, surgeon-centered strategies or semi- or totally autonomous applied sciences.

The ROSA platform, which is the cornerstone of Zimmer Biomet’s robotics providing, is quickly approaching 2,000 installations worldwide and is a market chief exterior of the US. Zimmer Biomet is dedicated to persevering with to advance the ROSA platform and is investing in a strong R&D pipeline that includes a number of new product and software program purposes anticipated between now and 2027. This contains ROSA Knee with OptimiZe, which has been submitted to the FDA and 510(okay) clearance is anticipated later this 12 months, in addition to ROSA Posterior Hip and the total industrial launch of ROSA Shoulder.

“Since our inception, we now have been singularly centered on advancing orthopedic robotics with expertise designed to soundly, effectively and precisely help surgeons with complete knee arthroplasty,” stated Benjamin Sexson, Chief Govt Officer of Monogram. “We’re thrilled by the chance so as to add our expertise to Zimmer Biomet’s main portfolio of surgical robotics, navigation options and trusted implants and to profit from their deep {industry} experience and international scale.”

Zimmer Biomet plans to fund the proposed transaction by a mixture of money on the stability sheet and different accessible debt financing sources. Zimmer Biomet expects to take care of a robust stability sheet and to proceed to help its said capital allocation priorities.

Zimmer Biomet believes this proposed transaction and the CVR construction is compelling from each a strategic and monetary standpoint. The acquisition of Monogram additional strengthens Zimmer Biomet’s capabilities in robotics, one of many quickest rising segments inside orthopedics. Zimmer Biomet expects the acquisition will contribute to income development in 2027 and past by bettering the Firm’s robotic knee adoption within the U.S., growing share of pockets by reaching new clients with a broader product vary, and increasing the Firm’s industry-leading international knee choices.

Zimmer Biomet anticipates the acquisition might be impartial to adjusted earnings per share in 2025, 2026 and 2027, and accretive in 2028 and past. Moreover, the transaction is projected to generate high-single digit return on invested capital (ROIC) by 12 months 5, with an growing contribution thereafter.

Closing of the proposed transaction is topic to receipt of required regulatory approvals, approval by Monogram’s widespread stockholders and different customary closing situations, and the merger is anticipated to shut later this 12 months.

Morgan Stanley & Co. LLC is serving as unique monetary advisor to Zimmer Biomet and Hogan Lovells US LLP is serving as authorized advisor.

Wells Fargo Securities, LLC is serving as unique monetary advisor to Monogram and Duane Morris LLP is serving as authorized advisor.

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