Closure of Zimmer dental HQ to result in 279 layoffs

A California WARN notice shows that 279 employees will be axed at the end of October due to the impending closure of Zimmer's Carlsbad, CA, dental headquarters, which has manufacturing and distribution functions.

Although it was unable to specify the timing or number of cuts at the time, FierceMedicalDevices in May revealed news of the closure due to the need for synergies from Zimmer's $13 billion takeover of Biomet, which resulted in the creation of Zimmer Biomet ($ZMH).

Zimmer Biomet CEO David Dvorak

The new company's dental headquarters will be consolidated into Biomet's previous dental headquarters in Palm Beach Gardens, FL. Distribution operations will also be relocated to Palm Beach Gardens, while manufacturing will be transferred to other company sites and outside suppliers, FierceMedicalDevices learned in May thanks to an internal company email announcing the news.

"Consolidating the operations will allow us to gain efficiency as well as leverage the combined companies' best-in-class technologies and operations expertise going forward," the email said. "In addition, we will optimize our cost structure by maximizing our capital utilization while continuing to improve our customer experience. Finally, consolidating our footprint will allow us to effectively work closely with our development teams and support product innovations."

Zimmer Biomet's dental business has roughly doubled in size thanks to the merger, which closed in June. Zimmer's dental devices had net sales of $242 million in 2014, compared with annual net sales of $259 million at Biomet's dental unit. The companies sell a variety of dental implants and related devices, including drill bits, abutments, and specialized screws, as well as oral scanners and the associated software.

In July, Zimmer Biomet promised $350 million in pretax net synergies by year three of the new company, with $135 million of the efficiencies occurring in the first year. But Zimmer Biomet CEO David Dvorak has been adamant that no sales people will be affected by the merger and subsequent integration plan.

- here's the WARN notice from the state government (received date Aug. 19)

Special Report: The 10 largest med tech M&A deals announced in 2014 - Zimmer/Biomet

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