Teleflex Incorporated (NYSE:TFX), a leading global provider of
medical technologies, today announced it has entered into a
definitive agreement to acquire privately-held Palette Life
Sciences AB for an upfront cash payment of $600
million at closing, and up to an additional $50
million upon the achievement of certain commercial milestones.
The acquisition is subject to customary closing conditions,
including receipt of certain regulatory approvals, and is expected
to be completed in the fourth quarter of 2023.
The acquisition will expand the Teleflex
Interventional Urology portfolio, which includes the UroLift®
System, to include Non-Animal Stabilized Hyaluronic Acid (NASHA)
spacer and tissue bulking products that improve patient outcomes in
urology and urogynecology disorders, colorectal conditions, and
radiation oncology procedures. Palette Life Sciences is estimated
to generate net sales of approximately $56 million, on a standalone
basis, in 2023. Assuming a December 1, 2023 close of the
transaction, the acquisition is not expected to significantly
impact Teleflex’s 2023 revenue.
“As part of our strategy to deliver long-term
durable growth, Teleflex is focused on deploying capital for
innovative products and technologies that can meaningfully enhance
clinical efficacy, patient safety and comfort, reduce
complications, and lower the overall cost of care,” said Liam
Kelly, Chairman, President and Chief Executive Officer of Teleflex.
“The acquisition of Palette Life Sciences will allow us to
incorporate this exciting technology into our Interventional
Urology business unit and bring urologists, radiation
oncologists, and other specialists more innovative technologies
that can positively impact patient care. The transaction is
consistent with our strategy to acquire assets that are accretive
to Teleflex’s growth rate. We expect the acquisition will be
immediately accretive to adjusted gross margin and will enhance our
adjusted operating margin in the near term. We believe Palette Life
Sciences will be a meaningful contributor to our growth in the
coming years. In 2024, we expect this business will achieve
year-over-year revenue growth in the high-teens to low 20% range,
which gives us further confidence in our ability to deliver on our
2023-2025 LRP financial objectives.”
A key product of Palette Life Sciences is
Barrigel®, a NASHA spacer designed to reduce
radiation delivered to the rectum during prostate cancer
radiation therapy, while increasing tumor control and patient
quality of life.1 Barrigel® is easily sculpted, highly visible on
transrectal ultrasound (TRUS), biodegradable, reversible, and
offers one-step assembly in all sites of service. It is estimated
that there will be 288,000 new cases of prostate cancer diagnosed
in the United States in 2023, with an incidence rate that has
increased by 3% per year since 2014.2 Barrigel® received FDA
marketing clearance in May 2022, is cleared for marketing in
Australia, and is CE Marked.
With urology being a growing market segment showing
positive trends, Teleflex expects the acquisition to further its
strategic vision and play a role in providing differentiated
technology to urologists and related specialties. Teleflex’s strong
peer-to-peer education, patient outreach, and clinical platform
already established for the UroLift® System can provide an
immediate benefit for clinicians and a strong runway for clinical
adoption of the Barrigel® product.
The Palette Life Sciences portfolio also includes
Deflux® and Solesta®, which are NASHA based tissue bulking agents
designed to treat pediatric vesicoureteral reflux and fecal
incontinence, respectively.
Financial SummaryAssuming a
December 1, 2023 close, the transaction is expected to be dilutive
to the Company’s adjusted earnings per share (excluding
non-recurring purchase accounting items and other acquisition and
integration related costs) in 2023 and 2024 by approximately $0.15
and $0.35, respectively.
Beginning in fiscal year 2025, and thereafter, the
Company expects the acquisition to be increasingly accretive to
adjusted earnings per share (excluding non-recurring purchase
accounting items and other acquisition and integration related
costs).
Teleflex plans to finance the acquisition
through borrowings under its revolving credit facilities and cash
on hand.
The Company intends to discuss this acquisition in
more detail on its upcoming second quarter 2023 earnings conference
call scheduled to be held on Thursday, August 3,
2023 at 8 a.m. ET.
About Teleflex
IncorporatedTeleflex is a global provider of medical
technologies designed to improve the health and quality of people’s
lives. We apply purpose driven innovation – a relentless pursuit of
identifying unmet clinical needs – to benefit patients and
healthcare providers. Our portfolio is diverse, with solutions in
the fields of vascular access, interventional cardiology and
radiology, anesthesia, emergency medicine, surgical, urology and
respiratory care. Teleflex employees worldwide are united in the
understanding that what we do every day makes a difference. For
more information, please visit teleflex.com.
Teleflex is the home of Arrow®, Deknatel®, LMA®,
Pilling®, QuikClot®, Rüsch®, UroLift® and Weck® – trusted brands
united by a common sense of purpose.
Forward-Looking StatementsAny
statements contained in this press release that do not describe
historical facts may constitute forward-looking statements. Any
forward-looking statements contained herein are based on our
management's current beliefs and expectations, but are subject to a
number of risks, uncertainties and changes in circumstances, which
may cause actual results or company actions to differ materially
from what is expressed or implied by these statements. These risks
and uncertainties are identified and described in more detail in
our filings with the Securities and Exchange Commission, including
our Annual Report on Form 10-K.
Teleflex, the Teleflex logo, Arrow, Deknatel, LMA,
Pilling, QuikClot, Rüsch, UroLift, and Weck are trademarks or
registered trademarks of Teleflex Incorporated or its affiliates,
in the U.S. and/or other countries.© 2023 Teleflex Incorporated.
All rights reserved.
Barrigel, Deflux and Solesta are trademarks or
registered trademarks of Galderma Holding S.A.
References:
- Mariados NF, Orio
PF, Schiffman Z, et al. Hyaluronic acid spacer for hypofractionated
prostate radiation therapy: a randomized clinical trial. JAMA
Oncol. 2023; e1-e8.
- Statistics for
Prostate Cancer. 2023. American Cancer Society.
Contacts:TeleflexLawrence
KeuschVice President, Investor Relations and Strategy
Development
investor.relations@teleflex.com610-948-2836
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