US-based medical device company Zimmer Biomet has agreed to acquire Embody, a privately-held medical device company focused on soft tissue healing.

Under the terms of the agreement, Zimmer Biomet is expected to make an upfront payment of $155m upon closing of the transaction.

Embody is eligible to receive a milestone payment of up to $120m upon achieving future regulatory and commercial milestones over a period of three years.

Zimmer Biomet said that the acquisition is expected to be accretive to overall revenue growth and slightly dilutive to adjusted earnings per share in 2023.

Zimmer Biomet chairman, president, and CEO Bryan Hanson said: “Embody’s differentiated products and innovative pipeline in the area of sports medicine support our continued focus on and investment in high-growth markets and underscores our commitment to bringing meaningful new advances to patients and surgeons.

“The planned acquisition of Embody is an important step in the ongoing transformation of ZB and the execution of our strategic priority to increase long-term growth and drive value creation.”

Embody is a medical technology company that provides novel collagen-based bio-fabrication techniques and products for the sports medicine market.

The acquisition includes the complete portfolio of Embody’s collagen-based bio-integrative solutions to support healing in the most challenging orthopaedic soft tissue injuries.

The solutions include TAPESTRY bio-integrative implant for tendon healing and TAPESTRY RC, an arthroscopic implant system for rotator cuff repair.

The acquisition, which is subject to customary closing conditions, is expected to be completed in February 2023.

Embody chief executive officer Jeff Conroy said: “We are excited for the potential to create value for patients and customers in new ways and believe the combination of Embody’s innovative products and Zimmer Biomet’s established portfolio will bring new solutions to the market that could redefine the standard of care.”