BMET Biomet (MM)

Biomet Orthopedics, Inc. and Biomet, Inc. (collectively "Biomet") (NASDAQ:BMET) recently initiated legal proceedings against Zimmer US, Inc. ("Zimmer"), former Biomet distributors, and David Montgomery, a former Biomet executive who resigned from Biomet in January 2007 and currently works for Zimmer. The thirteen count lawsuit filed in Marion County, Indiana alleges, among other things, that Zimmer and Montgomery attempted to create an unfair market advantage by engaging in a campaign to misappropriate Biomet confidential information, interfering with Biomet's contractual relations with distributors and attempting to buy the assets of most of Biomet distributors (including Biomet surgical instruments) throughout the country. The lawsuit further alleges that the limited number of distributors who accepted Zimmer�s offer are in violation of their contractual obligations to Biomet. Although nearly all of Biomet�s distributors rejected Zimmer�s offers and have remained with Biomet, and although no amount of money damages can completely compensate Biomet for the losses it has sustained as a result of this conduct, Biomet is nonetheless seeking to recover compensatory damages that are attributable to financial and other resources spent on signing new agreements with its sales force. To the extent Biomet sustained damages as a result of its former distributors agreeing to �sell� their assets to Zimmer, Biomet is seeking to recover lost profits and other damages as well. In addition, Biomet is seeking to recover punitive damages from the defendants. According to Jeff Binder, Biomet�s President and CEO, �It appears that Zimmer is engaged in a scheme to increase market share by attempting to indirectly buy our business relationships by �acquiring� our distributors. Although this scheme has been generally unsuccessful, it has nonetheless damaged Biomet. As part of its scheme, Zimmer has offered to enter into asset purchase agreements with most of Biomet�s distributors. Demonstrating the strength of Biomet�s products and relationships, only three Biomet distributors have accepted Zimmer�s offers.� �In Biomet�s view, Zimmer�s offers are thinly veiled attempts to induce our distributors to violate their agreements with us and induce sales representatives to convert our customers to Zimmer. In furtherance of its attempts to disrupt our business, Zimmer has even purchased Biomet surgical instruments. Given that Zimmer has absolutely no use for these instruments, we believe the acquisition of the instruments was an attempt to disrupt service to our customers.� �To this point we have: (1) retained a significant majority of our representatives and customers in the affected territories; (2) signed a very high percentage of our distributors across the United States to new agreements; and (3) purchased our instruments back from Zimmer as their company yielded to pressure � all at great cost to our company. Biomet will continue to compete, as we always have, by focusing in areas that are of real value to our customers and their patients � the quality and clinical results of our products, true technological advances, extraordinary service and enduring relationships.� About Biomet Biomet, Inc. and its subsidiaries design, manufacture and market products used primarily by musculoskeletal medical specialists in both surgical and non-surgical therapy. Biomet�s product portfolio encompasses reconstructive products, including orthopedic joint replacement devices, bone cements and accessories, autologous therapies and dental reconstructive implants; fixation products, including electrical bone growth stimulators, internal and external orthopedic fixation devices, craniomaxillofacial implants and bone substitute materials; spinal products, including spinal stimulation devices, spinal hardware and orthobiologics; and other products, such as arthroscopy products and softgoods and bracing products. Headquartered in Warsaw, Indiana, Biomet and its subsidiaries currently distribute products in more than 100 countries. Forward-Looking Statements This press release contains certain statements that are �forward-looking statements� within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are qualified by the inherent risks and uncertainties surrounding future expectations generally, and also may materially differ from actual future experience involving any one or more of such statements. Such risks and uncertainties include our ability to develop and market new products and technologies in a timely manner, the effect of the pending merger on Biomet�s business and its relationship with customers, distributors, employees and suppliers and the risk factors as set forth from time to time in Biomet�s filings with the SEC. The inclusion of a forward-looking statement herein should not be regarded as a representation by Biomet that Biomet�s objectives will be achieved. Biomet undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.