On April 21, 2025, we completed the acquisition of all outstanding shares of Paragon 28, Inc. ("Paragon 28"). At the effective time of the acquisition, each outstanding share of Paragon 28 was automatically cancelled and retired and converted into the right to receive (i) $13.00 in cash and (ii) a non-tradeable contingent value right ("CVR") entitling the holder to receive up to $1.00 per share in cash if certain revenue milestones are achieved. Upon completion of the acquisition, Paragon 28 became a wholly-owned subsidiary of Zimmer Biomet. We accounted for the Paragon 28 acquisition as a business combination under the acquisition method of accounting.

Paragon 28 is a leading medical device company focused exclusively on the foot and ankle orthopedic segment. The acquisition increases our market share in the foot and ankle segment, which has been growing faster than some of the other segments in which we compete. We paid $1,241.5 million in initial consideration utilizing cash on hand and borrowing $400.0 million on our five-year credit agreement and $150.0 million on our Uncommitted Credit Facility (as defined below). The CVRs issued to former Paragon 28 shareholders may result in up to approximately $90.0 million in additional consideration if certain revenue milestones are achieved. We determined the fair value of the additional consideration to be $36.8 million as of the acquisition date. The estimated fair value of this contingent consideration liability was calculated using a Black Scholes framework, utilizing strike prices at the maximum and minimum amount of the revenue that needs to be achieved to earn a payout, and discounting to present value the estimated payment. In addition, we incurred $72.4 million of acquisition expenses in the three and six-month periods ended June 30, 2025, primarily consisting of compensation expense and investment banking fees that are included in "Acquisition, integration, divestiture and related" in our condensed consolidated statement of earnings. Compensation expense includes $43.4 million related to the discretionary accelerated vesting of Paragon 28 unvested restricted stock units as agreed upon as part of the merger agreement.

The goodwill related to the Paragon 28 acquisition represents the excess of the consideration transferred over the fair value of the net assets acquired. The goodwill related to the acquisition is generated from the operational synergies, cross-selling opportunities and future development we expect to achieve from the technologies acquired. The goodwill related to this acquisition is not expected to be deductible for tax purposes. The following table summarizes the changes in the carrying amount of goodwill by reportable segment (in millions):


	Americas			EMEA			Asia Pacific		Total
Balance at December 31, 2024
Goodwill	$	8,376.8		$	1,370.5		$	538.3	$	10,285.6
Accumulated impairment losses		(7.7	)		(1,326.8	)		-		(1,334.5	)
	$	8,369.1		$	43.7		$	538.3	$	8,951.1
Purchase accounting adjustments related to 2024 acquisitions		0.8			-			-		0.8
Paragon 28 acquisition		531.6			42.3			69.2		643.1
Currency translation		101.1			2.1			11.3		114.5
Balance at June 30, 2025
Goodwill	$	9,010.3		$	1,414.9		$	618.8	$	11,044.0
Accumulated impairment losses		(7.7	)		(1,326.8	)		-		(1,334.5	)
	$	9,002.6		$	88.1		$	618.8	$	9,709.5

The purchase price allocation for the Paragon 28 acquisition is preliminary as of June 30, 2025. We need additional time to refine the fair value of inventory and intangible assets acquired, finalize tax accounts and finalize the estimated fair values of contingent liabilities. There may be differences between the preliminary estimates of fair value and the final acquisition accounting. The final estimates of fair value are expected to be completed as soon as possible, but no later than one year after the acquisition date.


Cash consideration	$	1,241.5
Contingent consideration		36.8
Fair value of consideration transferred	$	1,278.3

Cash	$	15.2
Accounts receivable, net		37.4
Inventories		151.0
Prepaid expenses and other current assets		5.6
Intangible assets subject to amortization:
Technology		309.0
Trademarks and trade names		42.5
Customer relationships		90.5
Intangible assets not subject to amortization:
In-process research and development (IPR&D)		98.0
Property, plant and equipment		68.0
Other assets		3.1
Current liabilities		(93.9	)
Deferred income taxes		(89.5	)
Other long-term liabilities		(1.8	)
Total identifiable net assets	$	635.2

Goodwill	$	643.1

The amortization periods selected for technology, trademarks and trade names and customer relationships were 10 years, 15 years and 5 years, respectively.

The IPR&D intangible assets relate to various R&D projects which are expected to completed by the end of 2027 or earlier. Upon commercialization, the IPR&D will be reclassified to definite-lived intangible assets and amortized over the applicable estimated useful life. The fair values of the IPR&D intangible assets were determined using an income approach. Remaining costs to complete these projects are expected to be an immaterial amount of our total annual R&D spending.

On April 2, 2024, we completed the acquisition of all the outstanding shares of a third party orthopedics distributor in the Europe, Middle East and Africa ("EMEA") market. Prior to the acquisition, the distributor sold our products to its customers. The acquisition is expected to improve our margins and allow us to better serve the end customers.

On April 29, 2024, we completed the acquisition of all the outstanding shares of V.I.M.S. Vidéo Interventionnelle Médicale Scientifique, a privately-held medical device company based in France, which expands our portfolio in the sports medicine market.

On August 16, 2024, we completed the acquisition of all the outstanding shares of a privately-held medical device company based in the United States, which expands our portfolio in the CMFT market.

On October 11, 2024, we completed the acquisition of all the outstanding shares of OrthoGrid Systems, Inc. (“OrthoGrid”), a privately-held medical device technology company focused on artificial intelligence-driven surgical guidance for total hip replacement, which expands our portfolio in the hips market.

These four acquisitions are collectively referred to in this report as the “2024 acquisitions”. Initial consideration related to the 2024 acquisitions was $294.8 million, with additional consideration up to $111.6 million, subject to the achievement of future regulatory milestones and commercial milestones. We determined the fair value of the additional consideration to be $61.0 million as of the acquisition dates.

The goodwill related to the 2024 acquisitions represents the excess of the consideration transferred over the fair value of the net assets acquired. The goodwill related to these acquisitions is generated from the operational synergies, cross-selling opportunities and future development we expect to achieve from the technologies acquired. No goodwill is expected to be deductible for income tax purposes. The goodwill related to the two acquisitions that occurred in April of 2024 is included in the EMEA operating segment and reporting unit. The goodwill related to the acquisition that occurred in August of 2024 is included in the Americas operating segment and the Americas CMFT reporting unit. The goodwill related to the OrthoGrid acquisition is included in the Americas operating segment and the Americas Orthopedics reporting unit.

The purchase price allocations for the acquisitions which occurred in April and August of 2024 were final as of June 30, 2025. The purchase price allocation for the OrthoGrid acquisition is preliminary as of June 30, 2025. We need additional time to evaluate the tax attributes of the transaction, which may change the recognized tax assets and liabilities. There may be differences between the preliminary estimates of fair value and the final acquisition accounting. The final estimates of fair value are expected to be completed as soon as possible, but no later than one year after the acquisition date.

The following table summarizes the estimates of fair value of the assets acquired and liabilities assumed related to the 2024 acquisitions (in millions):


Cash consideration	$	294.8
Contingent consideration		61.0
Fair value of consideration transferred	$	355.8

Current assets	$	24.9
Intangible assets subject to amortization:
Technology		112.5
Trademarks and trade names		5.0
Customer relationships		40.8
Intangible assets not subject to amortization:
In-process research and development (IPR&D)		7.0
Other assets		4.7
Current liabilities		(6.0	)
Deferred income taxes		(33.9	)
Other long-term liabilities		(0.5	)
Total identifiable net assets	$	154.4

Goodwill	$	201.4

The weighted average amortization periods selected for technology, customer relationships and trademarks and trade names were 14 years, 9 years and 14 years, respectively. Upon receiving regulatory approval subsequent to the applicable acquisition date, the $7.0 million of IPR&D was reclassified to a definite-lived intangible asset and began amortizing over the applicable estimated useful life.

In the three and six-month periods ended June 30, 2025, there were no material adjustments to the preliminary values of any of the acquisitions.

We have not included pro forma information and certain other information under GAAP for any of the acquisitions described in this Note because they did not have a material impact on our financial position or results of operations.

In the six-month period ended June 30, 2024, we recognized intangible assets of $101.6 million related to agreements we entered into in order to acquire the ownership rights or gain access to various technologies. The weighted average amortization period selected for these intangible assets was 7 years. The contractual payments under these agreements are included in "Acquisition of intangible assets" in our condensed consolidated statements of cash flows. There were no material agreements of a similar nature entered into during the six-month period ended June 30, 2025. However, we did make $32.4 million of payments in the six-month period ended June 30, 2025, related to contractual obligations from similar agreements which were accrued for as of December 31, 2024.