MIAMI - H.I.G. Capital, a global alternative investment firm, has announced the completion of its acquisition of ZimVie Inc's (NYSE: ZIMV) spine division, which will now operate independently under the name Highridge Medical. The transaction, involving a leading player in the global spinal device market, marks an expansion for H.I.G. into the medical device sector.
Highridge Medical, headquartered in Westminster, CO, is recognized for its comprehensive portfolio of spinal treatment products and bone healing therapies.
The company will be led by newly appointed CEO Glen Kashuba, with Rebecca Whitney continuing as President. Eric Major, founder and former CEO of K2M Group Holdings, will take the role of Executive Chairman of the Board of Directors, and Chris O'Connell, former EVP & Group President at Medtronic (NYSE:MDT) and CEO of Waters Corporation (NYSE:WAT), will also join the board.
Glen Kashuba expressed confidence in Highridge's foundation and its commitment to improving spine care through research and development (R&D), product innovation, and new product offerings. He anticipates that the partnership with H.I.G. will benefit distributors, surgeons, and patients by establishing Highridge as the largest privately held spine business in the industry.
Rebecca Whitney commented on the growth opportunities ahead for Highridge and the partnership's potential to enhance the company's market position.
Mike Gallagher, Managing Director at H.I.G., highlighted Highridge's solid foundation, market-leading product portfolio, surgeon satisfaction, and patient outcomes. Gwen Watanabe, also a Managing Director at H.I.G., mentioned the company's strong position in the spine market and the potential for growth through operational excellence, increased R&D investment, and strategic acquisitions.
H.I.G.'s investment in Highridge is part of its broader strategy in the medical device sector, which includes previous investments in Augmedics, Vertiflex, Neuwave Medical, and Intact Vascular.
This acquisition is based on a press release statement from H.I.G. Capital.
InvestingPro Insights
As H.I.G. Capital secures its foothold in the medical device sector with the acquisition of ZimVie Inc's spine division, financial metrics and market behavior offer a glimpse into the company's current standing. ZimVie Inc (NYSE: ZIMV), now operating as Highridge Medical, has seen a notable 128.08% one-year price total return, highlighting a significant investor confidence and a robust performance in the market.
Despite this impressive return, ZimVie faces challenges ahead. Analysts predict a sales decline for the current year, which could impact Highridge Medical's revenue streams. This is coupled with the company's current valuation, trading at a high EBITDA multiple, reflecting a premium price for its earnings before interest, taxes, depreciation, and amortization. Investors might see this as a cautionary indicator, considering the company's profitability concerns, as analysts do not anticipate ZimVie to be profitable this year.
Yet, the company stands on solid ground with a gross profit margin of 63.48% over the last twelve months as of Q4 2023, which could be a testament to its operational efficiency. Moreover, ZimVie's liquid assets exceed its short-term obligations, which may provide the financial flexibility needed for Highridge Medical's planned R&D and market expansion.
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