Treace Medical ‘a rarer asset’ after Zimmer buys Paragon 28, says Lake Street

Lake Street analyst Ben Haynor notes Zimmer Biomet (ZBH) announced a deal to acquire Paragon 28 (FNA) for $13 per share plus a contingent value right worth up to $1 per share whose value is determined based on 2026 net sales. After Zimmer actively made statements saying they felt there were numerous better opportunities for capital allocation in areas of their business other than foot and ankle, the firm was “surprised ZBH has decided to play the M&A game in the F&A segment,” but the firm also thinks the announcement makes Treace Medical (TMCI) “a rarer asset” and a more likely take-out candidate. The firm, which believes Treace could see a premium multiple because it is less diversified, reiterates a Buy rating and $14.50 price target on the shares.