SCHEDULE: Zimmer Biomet to Acquire Monogram Technologies in Cash and CVR Deal

Zimmer Biomet Holdings, Inc. and its subsidiary, Honey Badger Merger Sub, Inc., have entered into a definitive agreement to acquire Monogram Technologies Inc. for a combination of cash and contingent value rights, valuing common stock at up to $16.41 per share.

Summary

• Zimmer Biomet Holdings, Inc. and its wholly-owned subsidiary, Honey Badger Merger Sub, Inc., are acquiring Monogram Technologies Inc.
• The acquisition will be effected through a merger where Honey Badger Merger Sub, Inc. will merge into Monogram Technologies Inc., with Monogram continuing as a wholly-owned subsidiary of Zimmer Biomet.
• Common Stock holders will receive $4.04 per share in cash plus one Contingent Value Right (CVR) per share, with a maximum aggregate CVR payment of $12.37 per share, subject to revenue and other milestones.
• Series D Preferred Stock holders will receive $2.25 per share plus accrued but unpaid dividends in cash.
• Series E Preferred Stock holders will receive $100.00 per share in cash.
• Certain "In the Money" Company Options will be converted into cash payments and/or CVRs, while other options will be cancelled without consideration.
• The Board of Directors of Monogram Technologies Inc. has unanimously approved the merger agreement.
• Zimmer Biomet and Honey Badger Merger Sub collectively hold beneficial ownership of 9,754,256 shares of Monogram Common Stock, representing 27% of the outstanding shares, due to voting agreements.
• The calculation of beneficial ownership is based on 36,159,576 shares of Common Stock outstanding as of July 10, 2025.

Sentiment

Score: 7

Explanation: The document details a definitive merger agreement with unanimous board approval and significant shareholder voting commitments, indicating a high likelihood of transaction completion. The CVR component offers potential upside, though its realization is contingent. The terms appear standard for an acquisition in this sector.

Positives

• Monogram Technologies Inc. Board of Directors has unanimously approved the merger, indicating strong internal alignment.
• The acquisition provides a clear exit strategy and liquidity for Monogram Technologies Inc. shareholders.
• The CVR component offers potential upside for common stockholders based on future performance milestones.
• Voting agreements with key stockholders (Pro-Dex, Inc., Benjamin Sexson, Douglas Unis, Kamran Shamaei) representing 27% of outstanding shares increase the likelihood of stockholder approval.

Negatives

• The cash component of the common stock consideration ($4.04) is relatively low compared to the potential maximum value ($16.41), with a significant portion dependent on contingent future performance.
• Company Options that are not "In the Money" or those with exercise prices equal to or greater than the maximum merger consideration will be cancelled without consideration.
• A termination fee of $11,000,000 is payable by Monogram Technologies Inc. to Zimmer Biomet under certain circumstances, including if Monogram pursues a superior proposal or if its Board changes its recommendation.

Risks

• The merger is subject to Monogram Technologies Inc. stockholder approval, requiring a majority of outstanding common stock.
• Regulatory approvals, including the expiration or termination of the Hart-Scott-Rodino Antitrust Improvements Act waiting period, are required.
• The merger could be prevented by legal restraints.
• The accuracy of representations and warranties and compliance with covenants by all parties are conditions to closing.
• For Parent and Merger Sub, the absence of a material adverse effect relating to Monogram Technologies Inc. is a closing condition.
• The contingent value rights (CVRs) are subject to the achievement of certain revenue and other milestones, meaning the full $12.37 per share may not be realized.
• The merger agreement contains termination rights for both parties, which could lead to the transaction not being consummated.

Future Outlook

The document outlines the definitive agreement for Zimmer Biomet to acquire Monogram Technologies Inc., with the intent for Monogram to become a wholly-owned subsidiary. The future outlook for Monogram Technologies Inc. as an independent entity is limited, as it is expected to be integrated into Zimmer Biomet's operations. The CVR component provides a forward-looking incentive tied to Monogram's future revenue and other milestones post-acquisition.

Management Comments

• The Board of Directors of Monogram Technologies Inc. has unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Merger.
• Monogram Technologies Inc. has agreed to use commercially reasonable efforts to conduct its business in the ordinary course during the pre-closing period and not to take certain actions without Parent's prior written consent.
• Monogram Technologies Inc. has agreed to call a meeting of its stockholders for the purpose of voting on the adoption of the Merger Agreement.
• Monogram Technologies Inc. has agreed not to solicit alternative acquisition proposals or engage in related discussions, nor to withdraw or modify its Board's recommendation, subject to certain exceptions.

Industry Context

This acquisition aligns with the ongoing consolidation trend in the medical technology sector, where larger players like Zimmer Biomet seek to expand their portfolios, particularly in specialized areas like orthopedic reconstructive products, sports medicine, and integrated digital/robotic technologies, which are core to Zimmer Biomet's business. Acquiring Monogram Technologies Inc. could enhance Zimmer Biomet's offerings or intellectual property in these areas, potentially strengthening its competitive position against other global medical device manufacturers.

Comparison to Industry Standards

• The use of a Contingent Value Right (CVR) in a merger consideration is a common mechanism in the biotechnology and medical technology sectors, particularly when valuing companies with pipeline assets or uncertain future revenue streams, similar to deals seen with companies like Celgene (acquired by Bristol-Myers Squibb, which included CVRs tied to drug approvals) or Allergan (acquired by AbbVie, also involving CVRs).
• The 27% beneficial ownership through voting agreements is a significant pre-commitment, often sought by acquirers to de-risk shareholder approval, comparable to similar strategic acquisitions where key founders or institutional investors commit their shares.
• The $11 million termination fee represents approximately 0.7% of the potential maximum equity value (36.16M shares * $16.41/share = ~$593M), which is within the typical range (often 1-4%) for such transactions, reflecting standard deal protection mechanisms.

Corporate Governance

Stakeholder Impact

• Shareholders (Common Stock): Will receive a fixed cash payment and a contingent value right, offering immediate liquidity and potential future upside based on performance milestones.
• Shareholders (Preferred Stock): Will receive fixed cash payments, providing liquidity for their shares.
• Employees: The document does not explicitly detail impact on employees, but typically in an acquisition, there can be changes in management structure, roles, and potential redundancies or integration into the acquiring company's workforce.
• Customers: The acquisition by a larger medical technology company like Zimmer Biomet could lead to expanded product offerings, improved support, or changes in product strategy for Monogram's existing customers.
• Suppliers: Integration into Zimmer Biomet's supply chain could lead to changes in supplier relationships for Monogram.
• Creditors: The merger will likely impact Monogram's financial structure and debt obligations, which would be assumed or refinanced by Zimmer Biomet.

Next Steps

• Monogram Technologies Inc. to call, give notice of, convene, and hold a meeting of its stockholders to vote on the adoption of the Merger Agreement.
• Parties to use reasonable best efforts to obtain all required regulatory approvals, including the expiration or termination of the Hart-Scott-Rodino Antitrust Improvements Act waiting period.
• Entry into the contingent value rights agreement at or immediately prior to the Effective Time.
• Consummation of the Merger, subject to satisfaction of closing conditions.

Key Dates

Recommendation

Keywords

Merger, Acquisition, Zimmer Biomet, Monogram Technologies, Contingent Value Right, CVR, Medical Technology, Orthopedic, SEC Filing, Schedule 13D, Corporate Governance, Stockholder Approval, Hart-Scott-Rodino, Voting Agreement