INDIANAPOLIS — A group of private investors that could include a founder of Biomet Inc. has offered $10.9 billion in cash for the orthopedics maker as they seek to capitalize on baby boomers who want to turn back the clock.
The consortium offered $44 per share, 27 percent more than Biomet's closing price on April 3, the last trading day before the merger talk began. The offer is $1 per-share higher than what one analyst said would be justified last week.
Wall Street greeted the news with skepticism. Biomet shares fell 41 cents, or 1 percent, to close at $41.59 in trading Monday on the Nasdaq Stock Market.
But Linda Varoli, vice president of merger research with New York-based Wall Street Access, said the $10.9 billion purchase price — which will be paid with cash and loans — reflects the potential of the industry, which has been rattled recently by antitrust concerns.
In June, Biomet and three other orthopedics makers announced they had received subpoenas stemming from possible criminal violations in the manufacturing and sale of orthopedic implant devices.
"They wouldn't be making the investment if they didn't see some definite future growth in the company, and most likely in the industry in general," Varoli said of the consortium.
Monday's announcement ended merger speculation brewing since Biomet disclosed in April that it had hired Morgan Stanley to explore "strategic alternatives." The company recently had discussions with British rival Smith & Nephew LLC.
Biomet, established in 1977, is one of three orthopedics companies based in Warsaw, Ind., about 40 miles west of Fort Wayne. DePuy Orthopaedics Inc. and Zimmer Holdings Inc. also have operations there.
Orthopedic companies are counting on growth as the nation's 76 million baby boomers reach the age when knees, hips and shoulders sometimes need replacing.
Zimmer Holdings Inc. projects its 2007 sales to top $3.82 million, an increase of about 10 percent over 2006.
"The number of people who will be in the age category that's typical of joint replacement will be continuing to grow for quite some time," said company spokesman Brad Bishop.
Baby boomers want to remain more active than past generations, said Christopher Kaeding, interim chairman of the Department of Orthopaedics at Ohio State University. "They don't just want to sit there in a rocking chair," Kaeding said. "They have higher expectations of what they want to do in terms of physical activity."
Biomet's buyers include Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts and the Texas Pacific Group. Biomet founder Dane A. Miller, who resigned as CEO in March, also could join the deal, the company said.
Biomet's board voted in favor of the deal, which is subject to shareholder approval and antitrust clearance. Biomet officials said in a statement they expect the acquisition to be completed by Oct. 31. The company's stock would be delisted from the Nasdaq once the deal closed.
Company officials did not return messages left by The Associated Press.
"This transaction offers shareholders the ability to realize substantial value from their investments in Biomet and provides important benefits to our customers, team members and other stakeholders," interim President and Chief Executive Daniel P. Hann said in a statement.
Biomet, which has about 6,300 employees total, including 1,350 workers in Indiana, will remain in Warsaw.
Contributing: Wally Witkowski