Zimmer Biomet plans to spin off its spine and dental units to create a new company.
"This transaction will position us to prioritize resources, simplify our operating models and deliver greater value through two independent publicly traded companies," Bryan Hanson, Zimmer Biomet CEO, said in a Feb. 5 news release.
Mr. Hanson will continue to serve as CEO of Zimmer Biomet. The company said it will remain a leader in orthopedic markets such as knees; hips; sports medicine, extremities and trauma; and craniomaxillofacial and thoracic.
Full-year net sales for the company's dental, spine, and craniomaxillofacial and thoracic line decreased 10.1 percent to $1.04 billion year over year.
The company projects the spinoff to be accretive to revenue growth by approximately 50 basis points over the course of its five-year strategic plan, accelerate adjusted earnings per share growth, and expand adjusted EBITDA and operating margins.
Zimmer Biomet plans to maintain its investment grade rating while continuing to invest in innovation and tuck-in acquisitions in higher growth markets.
The search for the spinoff company's CEO is in its final stages. The company's board of directors, management and headquarters will be announced as they are finalized.