Fitch Ratings assigned a “BBB” rating to the proposed U.S. dollar- and euro-denominated senior unsecured notes of Zimmer Biomet.
The rating reflects Fitch’s expectation that Zimmer Biomet will maintain EBITDA leverage between 2.5x and 3.0x despite pressure from its U.S. sales force restructuring. Proceeds may be used to repay debt, repurchase shares or finance acquisitions, according to a Nov. 5 news release,
Fitch expects the orthopedic device company’s organic sales to grow in the low single digits in 2026, compared with consistent mid-single-digit growth over the past five years. Its adjusted EBITDA margin is expected to contract approximately 50 basis points, following an approximately 150-basis-point decline in 2025.
Fitch attributed the slower growth partly to Zimmer Biomet’s two-year initiative to convert substantial portions of its U.S. sales force from independent agents to employees. Tariffs, the Paragon 28 acquisition, price erosion and sales force investment are expected to weigh on margins.
The restructuring includes additional resources for robotics, ASCs and sports medicine, extremities and trauma. Fitch expects operating performance to improve in 2027.
Zimmer Biomet is targeting approximately $1 billion in share repurchases in 2026 before shifting its focus toward acquisitions in 2027. Fitch assumes about $2.5 billion in business development spending between 2026 and 2029.
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