Biomet in Talks to Resolve DOJ Probe

Medical device maker Biomet Inc. said Monday it has started talks with the U.S. Attorney’s Office aimed at resolving an inquiry into past consulting and professional service agreements with orthopedic surgeons using or considering the use of the company’s hip or knee implants. In a regulatory filing, the company said any resolution could require monetary payments, cause the company to significantly change some of its existing business practices, and include the potential for additional governmental oversight. Biomet said it intends to continue to cooperate fully with the Department of Justice inquiry, but can’t assure it will reach a consensual resolution. On March 30, 2005 the company said it received a subpoena from the Department of Justice through the U.S. Attorney for the District of New Jersey requesting documents related to any consulting and professional service agreements with orthopedic surgeons using or considering the use of the company’s hip or knee implants from January 2002 through March 29, 2005. Similar inquiries were directed to other companies in the orthopedics industry, the company said. On July 19, 2006, Biomet received a letter from the Justice Department requesting additional documents related to consulting and service agreements from January 1998 through the present, as well as research and other grant agreements for that same time period. In addition, the requested information related to company-sponsored training events, the selection process used by Biomet to identify consultants and researchers, its product design process for hip and knee implants and information on Biomet’s orthopedic sales force. The company subsequently received additional requests for information, both informally and by subpoena. In June, a group of private equity firms began a tender offer to buy Biomet for about $11.4 billion. The $46 per share offer expires on July 11 and is contingent upon at least 75 percent of total shares being tendered. The consortium includes Texas Pacific, Blackstone Group, Kohlberg Kravis Roberts & Co. and Goldman Sachs & Co. SOURCE: Forbes