DEFA14A: ZimVie Faces Merger Lawsuits, Issues Supplemental Disclosures

ZimVie Inc. issues supplemental disclosures to its merger proxy amid stockholder lawsuits, reaffirms board's unanimous recommendation for Zamboni Parent acquisition.

Summary

• ZimVie Inc. (the Company) entered into an Agreement and Plan of Merger (the Merger Agreement) on July 20, 2025, with Zamboni Parent Inc. and Zamboni MergerCo Inc., for MergerCo to merge into the Company, making ZimVie a wholly owned subsidiary of Parent.
• Consummation of the Merger is subject to stockholder approval and other customary closing conditions.
• Since the filing of the definitive proxy statement (Proxy Statement) on September 2, 2025, three stockholder complaints have been filed: two in New York (Robert Williams v. ZimVie Inc., et al., and Richard McDaniels v. ZimVie Inc., et al.) and one in Florida (Martin Siegel v. Asar, et al.).
• These lawsuits, collectively referred to as the Stockholder Litigation, allege that the Proxy Statement omitted certain material information, asserting claims for negligent misrepresentation, concealment, and negligence.
• Attorneys representing other purported stockholders have also sent demand letters (Demand Letters) alleging similar disclosure insufficiencies.
• The lawsuits seek various remedies, including enjoining or rescinding the merger, awarding damages, and declaring violations of securities and common law.
• The Company believes the allegations are without merit and that no further disclosures are legally required.
• To avoid delaying or adversely affecting the Merger and to minimize litigation costs, ZimVie has voluntarily made supplemental disclosures to the Proxy Statement, without admitting liability or wrongdoing.
• These supplemental disclosures do not change the $19.00 per share cash consideration for stockholders or the timing of the Special Meeting scheduled for October 10, 2025.
• The Board continues to unanimously recommend voting FOR the merger proposals.

Sentiment

Score: 6

Explanation: The filing addresses significant negative events (stockholder litigation) but demonstrates the company's proactive steps to mitigate risks and keep the merger on track. The board's unanimous recommendation and unchanged merger terms provide some stability, but the existence of lawsuits introduces uncertainty.

Positives

• The Board of Directors unanimously recommends that stockholders vote FOR the proposed merger, indicating continued confidence in the transaction.
• The Company is proactively making supplemental disclosures to mitigate litigation risks and avoid potential delays to the merger timeline.
• The merger consideration of $19.00 per share in cash remains unchanged, providing certainty for stockholders.
• The timing of the Special Meeting for stockholders to vote on the merger, scheduled for October 10, 2025, remains unchanged.

Negatives

• Multiple stockholder lawsuits have been filed alleging material omissions and misrepresentations in the Proxy Statement related to the merger.
• The lawsuits seek remedies including enjoining or rescinding the merger, which could disrupt or terminate the transaction.
• The Company is incurring costs, risks, and uncertainties inherent in litigation, even if it believes the allegations are without merit.
• The implied per share equity value range from Centerview's Selected Public Company Analysis ($14.00 to $18.75) was below the merger consideration of $19.00, suggesting the offer is at the higher end of this valuation method.

Risks

• The proposed transaction may not be completed in a timely manner or at all.
• Failure to receive required approvals from the Company's stockholders.
• Various conditions to the consummation of the proposed transaction may not be satisfied or waived.
• Possibility of competing offers or acquisition proposals for the Company.
• Occurrence of any event, change, or circumstance that could lead to the termination of the definitive transaction agreement, potentially requiring the Company to pay a termination fee.
• The effect of the announcement or pendency of the proposed transaction on the Company's ability to attract, motivate, or retain key executives and employees.
• Impact on the Company's ability to maintain relationships with its customers, suppliers, and other business counterparties.
• Risks related to the proposed transaction diverting management's attention from ongoing business operations.
• Risk of stockholder litigation in connection with the proposed transaction, including resulting expense or delay.

Future Outlook

The Company anticipates the merger with Zamboni Parent Inc. to proceed, subject to stockholder approval and customary closing conditions. While management denies the merit of current litigation, it acknowledges the possibility of additional similar complaints or demand letters. Certain executive officers may engage in discussions and agreements with ARCHIMED or its affiliates regarding future employment or equity participation post-merger.

Management Comments

• The Company believes that the allegations contained in the Litigation Matters are without merit and that no further disclosures are required to supplement the Proxy Statement under applicable laws.
• The Company has determined to voluntarily make supplemental disclosures to avoid the risk of the Litigation Matters delaying or adversely affecting the Merger and to minimize the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing.
• The Board continues to unanimously recommend that you vote FOR the proposals to be voted on at the Special Meeting described in the Proxy Statement.

Industry Context

The filing details a proposed acquisition in the medical device sector, specifically involving ZimVie Inc., which operates in areas like dental and spine. The valuation analyses performed by Centerview reference several publicly traded companies and precedent transactions within the broader healthcare and medical technology industries, indicating a competitive landscape for mergers and acquisitions. The comparable companies and transactions suggest a range of valuation multiples for similar businesses, reflecting varying market perceptions and deal specifics.

Comparison to Industry Standards

• **Selected Public Company Analysis (EV/2025E Adj. EBITDA Trading Multiples):** Centerview compared ZimVie to Align Technology, Inc. (12.4x), DENTSPLY SIRONA Inc. (6.8x), Envista Holdings Corporation (9.3x), Henry Schein, Inc. (11.0x), and Straumann Group (19.6x). The median multiple was 11.0x, and Centerview applied a range of 8.0x to 10.5x to ZimVie's estimated 2025 Adj. EBITDA of $72 million.
• **Selected Precedent Transaction Analysis (TV/LTM Adj. EBITDA Multiples):** Centerview analyzed transactions including Patterson Companies, Inc. / Patient Square Capital (9.9x, December 2024), Vantive / The Carlyle Group Inc. (8.8x*, August 2024), KaVo Treatment Unit & Instrument Business of Envista Holdings Corporation / Planmeca Oy (6.4x**, September 2021), Analogic Corporation / Altaris Capital Partners, LLC (11.3x, April 2018), and Zest Dental Solutions / BC Partners (11.2x, February 2018). The median multiple was 9.9x, and Centerview applied a range of 9.0x to 11.5x to ZimVie's LTM Adj. EBITDA of $67 million.
• **Precedent Premia Paid Analysis:** Centerview reviewed 53 transactions since 2020 with transaction values between $500 million and $1.5 billion, finding a median premium of 39% and a mean premium of 45%. Centerview applied a premium range of 25% to 65% to ZimVie's closing share price of $8.44 on July 18, 2025.

Corporate Governance

Legal Proceedings

• Robert Williams v. ZimVie Inc., et al., No. 655560/2025 (N.Y. Sup. Ct.) filed September 17, 2025, alleging negligent misrepresentation and concealment, and negligence in violation of New York common law.
• Richard McDaniels v. ZimVie Inc., et al., No. 655584/2025 (N.Y. Sup. Ct.) filed September 18, 2025, alleging similar claims as Robert Williams v. ZimVie Inc., et al.
• Martin Siegel v. Asar, et al., No. 50-2025-CA-009567 (Fla. Cir. Ct.) filed September 17, 2025, alleging violation of the New Jersey Uniform Securities Law (1997) and negligent misrepresentation and concealment and negligence in violation of Florida and New Jersey common law.
• Attorneys representing several purported Company stockholders have sent demand letters alleging similar insufficiencies in the disclosures in the Proxy Statement.
• The lawsuits seek remedies including enjoining the merger, rescinding the closing of the stockholder vote, awarding actual and punitive damages, and declaring violations of applicable laws.

Related Party Transactions

• Centerview provided an updated customary disclosure letter regarding relationships between Centerview and its affiliates, and the Company, ARCHIMED, and ARCHIMED's affiliates. The letter identified no fee-paying engagements with ARCHIMED or its affiliates since January 1, 2023, and no ownership of securities of the Company or ARCHIMED or its affiliates.

Stakeholder Impact

• **Shareholders:** The merger consideration of $19.00 per share remains unchanged. Litigation introduces uncertainty but supplemental disclosures aim to provide more information for their vote. The board unanimously recommends voting FOR the merger.
• **Management/Employees:** Executive officers may engage in discussions with ARCHIMED or its affiliates regarding post-merger employment, compensation, or equity participation, indicating potential changes or opportunities.
• **Acquirer (Zamboni Parent Inc./ARCHIMED):** The litigation and supplemental disclosures are part of the due diligence and closing process, potentially increasing legal costs and requiring additional effort to secure stockholder approval.

Next Steps

• Stockholders to vote on the merger proposals at the Special Meeting on October 10, 2025.
• Potential for additional similar complaints or demand letters related to the merger.
• Executive officers may have discussions and enter into agreements with ARCHIMED or its affiliates regarding post-merger employment or equity participation.

Key Dates

Recommendation

The company is subject to a definitive merger agreement with Zamboni Parent Inc. at a cash consideration of $19.00 per share. While stockholder litigation has emerged, the company is addressing it with supplemental disclosures and the board unanimously recommends the merger. For an investor, the primary action is to hold shares to receive the merger consideration upon closing, assuming the merger proceeds as planned. The litigation introduces risk, but the company's actions aim to mitigate delays and ensure the transaction's completion.

Keywords

ZimVie Inc., Zamboni Parent Inc., Merger Agreement, SEC filing, Proxy Statement, Stockholder Litigation, Supplemental Disclosures, Acquisition, Corporate Governance, Risk Management, Financial Reporting, Healthcare, Medical Devices