Zimmer Holdings Inc. Corporate Credit Rating Lowered To 'BBB' On Biomet Acquisition

Orthopedic products maker Zimmer Holdings Inc. closed on its acquisition of Biomet Inc. for about $13.35 billion. As part of the transaction Zimmer issued about $3 billion in equity and $10 billion of debt. We expect Zimmer's adjusted net debt leverage of 0.3x for 2014 to rise to about 4x for 2015 and 3.5x 2016, pro forma for the Biomet acquisition. We are lowering our ratings on Zimmer, including the corporate credit and long-term issue-level ratings to 'BBB' from 'A-', and removing the ratings from CreditWatch, where we placed them with negative implications on April 24, 2014. The stable outlook on Zimmer reflects our expectation that the company can achieve modest revenue growth, with stable to improving margins, with debt

...+ Orthopedic products maker Zimmer Holdings Inc. closed on its acquisition of Biomet Inc. for about $13.35 billion. As part of the transaction Zimmer issued about $3 billion in equity and $10 billion of debt. + We expect Zimmer's adjusted net debt leverage of 0.3x for 2014 to rise to about 4x for 2015 and 3.5x 2016, pro forma for the Biomet acquisition. + We are lowering our ratings on Zimmer, including the corporate credit and long-term issue-level ratings to '###' from 'A-', and removing the ratings from CreditWatch, where we placed them with negative implications on April 24, 2014. + The stable outlook on Zimmer reflects our expectation that the company can achieve modest revenue growth, with stable to improving margins, with debt leverage in the 3x to 4x range over the next two years, improving modestly over time. NEW YORK (Standard & Poor's) June 24, 2015--Standard & Poor's Ratings Services lowered its ratings on Warsaw, Ind.-based Zimmer Holdings Inc., including the corporate credit...

Ratings Action