Apparently, the $270 million in synergies Zimmer ($ZHM) expects to achieve from its $13.4 billion acquisition of Biomet does not include eliminating any sales reps.
"It is our intention that all sales representative positions from both companies will be retained post-closing. In fact, we believe this combination will lead to greater opportunities for the advancement and growth of sales representatives of the combined company," said the FAQ section of a May 20 letter to employees.
Biomet employees have expressed skepticism of such claims on the message board CafePharma, Mass Device points out. However, Zimmer CEO David Dvorak reiterated the point during a recent conference call with analysts, saying, "I think that if you spend the time in the field and have a close first hand understanding of how hard these people work and what they do to sell, to service, to partner with their customers, in a manner than ensures that the best possible patient outcome is realized you would understand that there's a lot of effort and energy that goes into that," according to Mass Device.
Another employee FAQ was how the transaction will help Zimmer gain momentum in the spine segment. "Enhancing the market competitiveness of some of the smaller businesses of each company was one of the reasons behind this combination. The addition of the Biomet Spine business will provide Zimmer an increased opportunity to reinvest in product development, offer additional medical education and training, and enhance our global distribution channel," Dvorak wrote.
In Q1 2014 Zimmer's spine unit had sales of $48 million, and during the company's earnings call, held on the day of the acquisition's announcement, Dvorak said it will double in size postmerger. Zimmer's dental business will also double in size from quarterly revenues of $61 million, Dvorak said.
The letter, cosigned by Dvorak and Biomet CEO Jeff Binder, also revealed that the companies have formed an integration steering committee consisting of four members from each side, including both CEOs.
Overall, the CEOs stressed that the merger will provide employees with "enhanced opportunities" and aimed to keep them focused. "We should keep in mind that we are independent companies until the transaction closes and we must compete as vigorously as we did before the announcement of the merger," they said.
The deal is expected to close in the first quarter of 2015. The companies had combined revenues of $7.8 billion in 2013.