Zimmer Biomet’s Contingent Payouts Hinge on 2026 Performance Targets

The financial milestones for the current business year are coming into sharp focus for Zimmer Biomet Holdings, Inc., more than a year after it fully integrated Paragon 28. As operational synergies progress, former shareholders of the acquired company are closely monitoring revenue growth. The attainment of specific targets will determine whether additional payments tied to Contingent Value Rights (CVRs) are triggered.

The foot and ankle orthopedics market is recognized as one of the fastest-growing segments within the broader industry. Demand for specialized solutions is particularly strong in Ambulatory Surgery Centers. The combined strength of Zimmer Biomet's global distribution infrastructure and Paragon 28's focused innovation is intended to drive the achievement of its ambitious revenue goals.

A key component of this growth strategy within musculoskeletal health is the ongoing expansion of the product portfolio. The integration allows Paragon 28 to leverage its parent company's extensive network while maintaining its specialization in niche products, such as its established Gorilla and Phantom systems.

Innovation Drive with New Product Launch

Last month, the company continued its innovation push with the commercial launch of the Brachiator™ Mini-Rail fixation system. Designed for complex small bone reconstructions and fracture stabilization in the foot and ankle, this new system aims to optimize surgical procedures through more precise correction mechanisms. Its development seeks to address existing gaps in specialized orthopedic care.

Should investors sell immediately? Or is it worth buying Paragon 28?

This product introduction is viewed as a potential catalyst for reaching the critical financial thresholds attached to the CVRs.

The Contingent Value Rights Hurdle

For investors, the primary focus in the 2026 fiscal year rests on the conditions of the Contingent Value Rights. These were issued as part of the April 2025 acquisition agreement, where shareholders received $13.00 per share in cash plus this non-tradable right to a potential future supplemental payment.

The full CVR payout of $1.00 per former share becomes payable if the specialized segment's net revenue reaches or exceeds $361 million in 2026. A proportional payment is made for revenue falling between $346 million and $361 million. The company has publicly stated a 2026 revenue target range of $346 million to $361 million for this segment.

Awaiting the Final Verdict

The definitive decision regarding CVR payments will be made after the close of the 2026 fiscal year, once the audited net revenue figures for the specialized segment are finalized. This outcome will determine whether former investors can realize the maximum additional return from the transaction.

• Parent Company: Zimmer Biomet Holdings, Inc.
• Key Product Launch: Brachiator™ Mini-Rail (January 2026)
• 2026 Revenue Target: $346 million to $361 million
• Potential CVR Payout: Up to $1.00 per former share