MEDICAL DEVICES

Should LDR's Austin employees be worried? Zimmer has a history of buying Austin companies and shutting them down

A Zimmer spokesman said the company plans to maintain a "significant presence" in Austin. 

Posted June 8th, 2016

When news broke Tuesday that Zimmer Biomet was spending $1 billion to buy local medical device company LDR Holdings, it's understandable if some employees were wary about holding on to their jobs. 

That's because Zimmer Biomet has previously purchased two Austin medical device companies and then eventually shut down those offices, consolidating its operations elsewhere. 

In 2013, Zimmer shut down the Austin office of its spine division, which used to be a company called Abbott Spine, consolidating those jobs in Minneapolis and Memphis, Tenn. 

Zimmer had purchased Abbott in 2008 for $360 million. Austin employees in product development, marketing and sales, in total about 100 people, were affected by this closure. 

Meanwhile in 2004, Zimmer also shut down the Austin operations of Centerpulse AG, an artificial hip, knee and spine replacement manufacturing facility. 

Centerpulse was purchased for $3.4 billion in 2003 by Zimmer and used to be called Sulzer Medica. 

The American-Statesman reported that 550 jobs were eliminated as part of that closure. 

Tuesday's news set off speculation among Abbott Spine employees - some of whom have gone on to work at LDR - about whether Zimmer intends to remain in Austin long-term, according to Julie Dye, a  former Abbott Spine employee who now runs her own PR firm. 

Dye said the medical device industry in Austin is still fairly small and tight-knit, and is especially known for developing spine and orthopedic products. LDR, which develops surgical products for people suffering from spine disorders, employs 200 people in Austin and over 550 globally.  It was founded in 2000 in France. 

But a Zimmer spokesman said Wednesday that this acquisition is "different" than the others and that the company plans to maintain a significant presence in Austin. 

In a letter to LDR Holdings employees on Tuesday, Adam Johnson, the Group President for the spine division of Zimmer Biomet, said that the two companies are "highly complementary."

"Both companies have talented teams and a similar history and culture of excellence," Johnson wrote. "Zimmer Biomet Spine and LDR have been focused in different segments of the spine market and each of these segments requires specific knowledge and experience."

The letter notes that Zimmer will be visiting LDR's headquarters in Austin and its offices in France, where it has major operations. 

In a separate statement released on Tuesday, LDR CEO Christophe Lavigne echoed these comments. Lavigne said it was "premature" to speculate about specifics.

"We have a phenomenal team at LDR that we feel has a lot to offer the combined organization," Lavigne said. "Zimmer Biomet plans to complement the spine business headquarters in Broomfield, Co. by maintaining a significant presence in LDR's strong technology hub here in Austin."

Comments