What Zimmer Biomet’s Leadership Transition Could Mean for Its Core Growth Strategy



Leadership transition at ZBH

In July 2017, David C. Dvorak stepped down as CEO (chief executive officer) and president of Zimmer Biomet Holdings (ZBH) and resigned from ZBH’s board of directors. This has been seen as an indication of trouble in the company. ZBH released disappointing 2Q17 earnings results about two weeks after Dvorak stepped down, on July 27, 2017.

ZBH CFO (chief financial officer) and senior vice president Daniel Florin has been appointed as interim CEO by the board. ZBH has retained an executive search firm for a permanent CEO.

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Growth during the tenure of Dvorak: key growth strategies

Dvorak had served as the CEO of Zimmer Biomet Holdings for a decade and positioned the company as a global musculoskeletal leader in the market. Through a significant number of key strategic acquisitions, Dvorak led the company into expansion and growth.

With this transition in leadership, ZBH could see a shift in its core growth strategy. Dvorak grew the company mainly through inorganic growth strategies, and today, the company is fundamentally strong, with a diversified product portfolio and geographic footprints. A new leader could help build on operational efficiencies and accelerate ZBH’s organic growth.

Leadership fundamentals have largely shaped the growth trajectory and path of medical technology companies in the US like Medtronic (MDT), Abbott Laboratories (ABT), and Boston Scientific (BSX). Investors can get exposure to Medtronic by investing in the iShares Russell Mid-Cap Value ETF (IWS), which has ~0.61% of its total holdings in MDT.


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