Teleflex Incorporated (NYSE:TFX), a leading global provider for
healthcare supplies and services, today announced it has entered
into a definitive agreement to acquire privately-held Z-Medica,
LLC, an industry-leading manufacturer of hemostatic products. Under
the terms of the agreement, Teleflex will acquire Z-Medica for an
upfront cash payment of $500 million at closing, and up to an
additional $25 million upon the achievement of certain commercial
milestones. Teleflex acquired certain tax attributes in the
transaction that are expected to result in future tax
benefits. Teleflex valued these tax attributes at
approximately $40 million in arriving at our purchase price. The
Boards of Directors of both Teleflex and Z-Medica have unanimously
approved the transaction. 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
2020.
Z-Medica’s hemostatic technologies are helping reinvent
hemorrhage control, with cost-effective, efficient bleeding control
solutions being adopted by markets worldwide. The company offers
three main brands, QuikClot®, Combat Gauze® and QuikClot
Control+®, which utilize a proprietary technology consisting of
gauze impregnated with kaolin. The technology activates and
accelerates the body’s natural clotting ability. QuikClot
Control+ is the first hemostatic dressing indicated for temporary
control of Class III or Class IV bleeding in the internal organ
space. Z-Medica’s products currently focus on the trauma surgery,
EMS, military, emergency department, and interventional segments,
with opportunities to expand into additional indications over
time.
“Teleflex’s strategy is to invest in 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. “The acquisition of Z-Medica, an industry
leading provider of hemostatic devices, enables Teleflex to
leverage strength in the hospital, EMS, and military call points,
with differentiated products that complement the EZ-IO and EZPLAZ 1
product portfolio.”
Mr. Kelly added, “We are excited to complete this acquisition,
given its above-company average revenue growth, above-company
average gross and operating margin profile, and our expectation
that the acquisition exceeds our cost of capital by year four.”
Eric Compton, President and CEO of Z-Medica, LLC said, "We are
excited to join the Teleflex organization, which shares our vision
for making our products the standard of care for the treatment of
hemorrhage control. Today's announcement is a recognition of our
focus on patient outcomes and the hard work and dedication of the
entire Z-Medica team. I want to especially thank Linden Capital
Partners and DW Healthcare Partners, who supported Z-Medica to
expand from its roots in the military to become a true global
healthcare and hospital focused business. We have tremendous
respect for the Teleflex team and look forward to partnering with
them to continue changing patient lives."
Teleflex plans to finance the acquisition at closing through
borrowings under its revolving credit facility. Following
consummation of the transaction, Teleflex may look to
opportunistically term-out revolving credit facility borrowings
through a note offering. Over the long-term, Teleflex intends to
maintain its net debt to adjusted EBITDA (as calculated in
accordance with the terms set forth in the Company’s existing
Credit Agreement) at approximately 3.0x.
The transaction is expected to contribute between $60 million
and $70 million of revenue and between $0.07 and $0.15 in adjusted
earnings per share in fiscal year 2021 (excluding non-recurring
purchase accounting items and other acquisition and integration
related costs). Beyond 2021, the Company expects the acquisition to
deliver a high-single digit revenue growth profile and further
accretion to adjusted earnings per share.
The Company intends to discuss this acquisition in more detail
on its upcoming third quarter 2020 earnings conference call
scheduled to be held on Thursday, October 29, 2020 at 8:00am
ET.
AdvisorsGuggenheim Securities
is acting as financial advisor to Teleflex and Holland & Knight
LLP is serving as legal counsel.
Truist Securities is acting as financial advisor to Z-Medica,
LLC and Kirkland & Ellis LLP is serving as legal counsel.
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®, Hudson RCI®, LMA®,
Pilling®, Rüsch®, UroLift®, and Weck® – trusted brands united by a
common sense of purpose.
About Z-Medica, LLC
Z-Medica, LLC, a Linden Capital Partners portfolio company, is a
medical device manufacturer based in Wallingford, CT that is
focused on the development, sale and marketing of innovative
hemorrhage control products. For over a decade, Z-Medica has helped
hospitals, militaries, law enforcement, first responders and
consumers around the globe save lives and improve medical outcomes
with their QuikClot® brand of products which are manufactured in
the United States. For more information, visit
http://www.QuikClot.com and http://www.Z-Medica.com. Follow us on
Twitter @QuikClot and Facebook @QuikClotFans.
About Linden Capital Partners
Linden Capital Partners is a Chicago-based private equity firm
focused exclusively on investing in the healthcare industry.
Linden’s strategy is based upon three elements: i) healthcare
specialization, ii) integrated private equity and operating
expertise, and iii) strategic relationships with large
corporations. Linden invests in middle market platforms across the
medical products, specialty distribution, pharmaceutical, and
services segments of healthcare. For more information, please visit
www.lindenllc.com.
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.
1EZPLAZ has not been approved by the FDA.
Source: Teleflex IncorporatedJake
ElguiczeTreasurer and Vice President, Investor
Relations610-948-2836
Teleflex (NYSE:TFX)
Historical Stock Chart
From Aug 2024 to Sep 2024
Teleflex (NYSE:TFX)
Historical Stock Chart
From Sep 2023 to Sep 2024