Requiem for the Big Z

Recently, TSB posted a job opening in the Twin Cities, much to our surprise many of our readers opined about the other company that plays in the spine market in Minnetonka (are they still there) by the name of Zimmer Spine. The big Z as they like to be called, entered into the spine market with the acquisition of Centerpulse AG in 2003. Several prominent publications recognized the ZC acquisition as the deal of the year. Mergers and Acquisitions along with Investors Dealers Digest couldn't contain themselves with their compliments. As one writer said, "the deal has all the makings of a sweeping epic." Oh where oh where are all those visionaries today? Could they really have meant that the deal had all the makings of a weeping epic?

It got even funnier when you listened to Ray Elliott glisten how 6,500 employees and 100 full time people contributed to joining these two companies together. But what would anyone expect from PT Barnum? With that many people involved, one knew that this acquisition was doomed for failure. With all the glory goes the pain. Elliott, whom had been lauded by every wannabe in the industry had no idea what he was getting the almighty Z into. Selling Joints and make belief trauma products is one thing, competing in the spine market didn't match the Zimmer ethos. Ray Elliott was at the helm of the ship and had named Terry Schlotterback as the interim President of Centerpulse. Elliott did many wonderful things during his tenure at the Big Z, yet, the fact remains that Ray didn't know his derriere from the articulating aspect of his forearm and humerus when it came to spine. For all intense and purposes, Schlotterback was doing his old pal Ray a favor. By the way, Terry is a great guy. Centerpulse really didn't offer much innovation unless one considered the BAK cylindrical cage a game breaker. Unfortunately, the cylindrical cage went the way of the Edsel, and if you don't believe me ask Surgical Dynamics and Stryker Spine. The only people that truly prospered from these devices were named Charlie Ray and Gary Michelson (I'll determine the size of the print). The cylindrical cage became an albatross. Our readers know the old cliche, give a surgeon a hammer, everything becomes a nail. No one had the clinical, nor biomechanical wherewithal to see the future, just ask Stryker, they thought that they would be able to fill this device with OP-1 and never look back. But this post isn't about Stryker.

In 2008, Zimmer closed on the acquisition of Abbott Spine for $360 million in cash. Supposedly, this purchase was going to position Zimmer for sustained growth in the future. In terms of building critical mass, it has resulted in organized chaos. In fairness to David Dvorak, he inherited a logistical mess, in addition, having legal skills is quite different than having spine experience. The transition and integration process was FUBAR. But it only goes to reinforce the argument that large companies have the financial ability to purchase other companies, but lack real experience in transitioning, exhibiting uncertainty and a lack of transparency, resulting in anxiety on the part of its foot soldiers.

Yes, fellow readers the Big Z did acquire some nice products from Abbott that should have given them some fire power only to squander this opportunity with poor strategic planning. Are they really in the game, or are they sitting on the sidelines singing, "put me in coach, I'm ready to play today." TSB wants to know what our readers think?