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• Earlier this week, Zimmer Biomet Holdings showcased its latest orthopedic robotics and digital health innovations, including FDA-cleared mBos TKA System and the recently acquired Monogram Technologies robotic platform, at the annual meeting of the American Association of Hip and Knee Surgeons.

• A standout revelation was the integration of AI-driven and autonomous technologies into the company’s expanding knee and hip portfolios, reflecting Zimmer Biomet’s commitment to advancing surgical precision and connected care solutions.

• We’ll examine how Zimmer Biomet’s integration of AI-driven orthopedic robotics could reshape the long-term outlook for its investment narrative.

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To be a shareholder in Zimmer Biomet, you need to believe in the power of innovation in orthopedic robotics and digital health to drive demand for advanced surgical solutions. This week’s showcase of FDA-cleared and AI-powered products could energize sentiment but is unlikely to meaningfully shift the company’s near-term reliance on successful product launches; ongoing industry pricing pressures still remain the key headwind.

Among the latest announcements, the FDA clearance of the mBos TKA System stands out for its relevance, as it highlights Zimmer Biomet’s efforts to keep pace in the competitive race for autonomous robotics and supports the company’s narrative of product-driven growth, even as full regulatory approvals for other key technologies remain pending.

In contrast, investors should be aware of increasing pricing pressures and the consequences if these persist through…

Read the full narrative on Zimmer Biomet Holdings (it’s free!)

Zimmer Biomet Holdings is projected to reach $9.2 billion in revenue and $1.3 billion in earnings by 2028. This outlook assumes a 5.5% annual revenue growth rate and an earnings increase of about $476 million from the current $823.5 million.

Uncover how Zimmer Biomet Holdings’ forecasts yield a $110.92 fair value, a 8% upside to its current price.

Simply Wall St Community members estimate fair value for Zimmer Biomet anywhere between US$95 and US$167.48 per share, with three unique perspectives. As these opinions range widely, consider the risk of ongoing pricing pressures that could challenge margin recovery and ultimately affect future earnings.

Explore 3 other fair value estimates on Zimmer Biomet Holdings – why the stock might be worth 8% less than the current price!

Disagree with existing narratives? Create your own in under 3 minutes – extraordinary investment returns rarely come from following the herd.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include ZBH.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

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Near-bankrupt Thames Water paid £20mn to cover the due diligence costs of KKR for its abortive attempt to rescue the UK’s largest water utility.

Thames Water selected KKR, the private equity giant, as its preferred bidder for an emergency rescue earlier this year. Thames Water was obliged to pay for the cost to potential buyers of assessing and researching the state of the utility’s infrastructure, operations and finances under the terms of the deal. The cost of that exercise topped £20mn, according to people familiar with the situation, largely due to fees paid to KKR’s advisers.

KKR pulled out of the deal in June, citing the risk of government intervention. It then passed its due diligence to lenders that are now trying to win approval from regulators for their own takeover of Thames Water, which provides water and sewerage services to about 16mn customers. Any deal will also need to be approved by London’s High Court.

The fees will raise concerns that cash is leaking out of the utility, which receives all of its income from customer water bills. Thames Water is struggling under the weight of £20bn debt and is trying to avoid temporary renationalisation under the government’s special administration regime after its previous owners — a clutch of pension and sovereign wealth funds — wrote off their investments and walked away from the business in 2024.

The scale of the due diligence effort, which included site visits to water and waste treatment facilities, was borne from the poor visibility Thames Water has over the state of its crumbling infrastructure, with documents revealing last year that the utility has failed to map almost a third of its sewage pipe network.

Reports produced by KKR and the creditors underscored the dangers of so-called “single point of failure risk” at some of Thames Water’s biggest sites, according to people familiar with the matter and documents seen by the Financial Times.

Coppermills water treatment works and Beckton sewage treatment works in East London were identified as the two facilities at the highest risk of outages, according to this analysis.

The cost of the due diligence work has added to a multimillion pound fee bonanza for advisers, bankers and lawyers trying to secure the financial future of the troubled company. The total advisory bill could top £200mn a debt restructuring is agreed, the High Court heard earlier this year; costs that the utility itself is covering from its own cash-strapped balance sheet.

KKR’s advisers on its abandoned bid included investment bank PJT Partners, law firm Kirkland & Ellis and management consultant Roland Berger.

Had KKR completed its rescue of Thames Water, the private equity firm would have covered the costs of its due diligence, according to a person familiar with the situation.

The senior creditors — which include US investment firms Elliott Management and Apollo Global Management — submitted their latest rescue proposal to regulator Ofwat earlier this month, pledging £3.15bn in equity and a 25 per cent writedown of the nominal value of their exposure. 

They have also asked for concessions on regulatory fines and targets. The creditors said they had “an ambition” to reduce sewage outflows by 30 per cent by 2030, well below the government’s target of 50 per cent.

Rival potential buyers including CK Infrastructure, owner of Northumbrian Water, have recently written to Ofwat claiming they have been “excluded” from the bidding process meaning it was unlikely to get the best deal for customers. CKI has indicated it would bid for Thames Water if the government puts it into its SAR.

The creditors said their plan “will see £20.5bn invested over the next five years and is the fastest and most reliable route to turn around Thames Water, deliver on customer priorities, clean up waterways and rebuild public trust.”  

KKR declined to comment on its due diligence costs.

Thames Water said: “Advisor fees are part of an extensive, complex recapitalisation; customers will not pay for these fees. We remain focused on securing a market-led recapitalisation that establishes the financial and regulatory foundations required to support the investment and performance improvements our customers expect and return the company to a stable financial foundation.”