Signs Definitive Agreement to Acquire Standard Bariatrics

WAYNE, Pa., Aug. 22, 2022 (GLOBE NEWSWIRE) -- Teleflex Incorporated (NYSE: TFX), a leading global provider of medical technologies, today announced it has entered into a definitive agreement to acquire Standard Bariatrics, Inc. which has commercialized an innovative powered stapling technology for bariatric surgery. Under the terms of the agreement, Teleflex will acquire Standard Bariatrics for an upfront cash payment of $170 million at closing, with additional consideration of up to $130 million payable 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 early in the fourth quarter of 2022.

 

The Titan SGS^® from Standard Bariatrics addresses unmet needs in sleeve gastrectomy by offering surgeons the longest continuous staple cutline of 23 centimeters^1,2. This first-of-its-kind stapler may help users achieve more consistent and symmetrical sleeve pouch anatomy, setting their patients up for optimized outcomes. While every patient's anatomy is different, the Titan SGS^® long staple line enables surgeons to plan and place staples in one firing, minimizing variations sometimes associated with the use of multiple overlapping short-cartridge staple firings^1,3. Additionally, the design may result in a more secure staple line and fewer chances of leaks, as evidenced with higher burst pressures⁴.

 

“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 Standard Bariatrics adds an exciting and differentiated product serving the large and growing sleeve gastrectomy market, which we estimate to be approximately 120,000 procedures⁵ annually in the U.S. In addition, the deal enables Teleflex to leverage our strength in our existing bariatric surgeon call point, with a differentiated product that complements many of our key surgical products, including our ligation portfolio, MiniLap^® Percutaneous Surgical System and Weck^® EFx Fascial Closure Portfolio.”

 

Mr. Kelly added, “We are excited to enter into this transaction, which we expect to be immediately accretive to Teleflex’s revenue growth and also enhance our gross margin profile over time. We also expect that the acquisition will exceed our cost of capital by the end of the fourth year following the completion of the acquisition.”

 

Teleflex plans to finance the acquisition at closing through borrowings under its revolving credit facility.

 

Financial Highlights and Update to 2022 Outlook

The Titan SGS was commercially launched in the third quarter of 2021. Standard Bariatrics’ revenues for 2022 are expected to be approximately $15 million.

For fiscal year 2022, the transaction is not expected to contribute meaningfully to Teleflex revenue and is expected to be approximately $0.10 dilutive to adjusted earnings per share (excluding non-recurring purchase accounting items and other acquisition and integration related costs).

For fiscal year 2023, the transaction is expected to contribute between $30 and $35 million of revenue and be approximately $0.10 to $0.15 dilutive to adjusted earnings per share (excluding non-recurring purchase accounting items and other acquisition and integration related costs). The transaction is expected to be accretive to revenue growth and adjusted EPS thereafter.

The Company will provide an update to its 2022 financial outlook on its third quarter earnings conference call.

 

About Teleflex Incorporated
Teleflex 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 Statements

This press release contains forward-looking statements, including, but not limited to, statements regarding our expectation that our acquisition of Standard Bariatrics will be completed early in the fourth quarter of 2022; our expectation that the transaction will enable us to leverage our strength in our existing bariatric surgeon call point; our expectation that the transaction will be immediately accretive to our revenue growth and will enhance our gross margin profile over time; our expectation that the acquisition will exceed our cost of capital by the end of the fourth full year following our completion of the transaction; our expectation that we will finance the acquisition at closing through borrowings under our revolving credit facility; Standard Bariatrics’ expected 2022 revenues; statements regarding forecasted financial impacts from the transaction, including with respect to revenue and adjusted earnings per share for 2022, 2023 and thereafter. Actual results could differ materially from those in the forward-looking statements due to, among other things, changes in business relationships with and purchases by or from major customers or suppliers; delays or cancellations in shipments; demand for and market acceptance of new and existing products; our inability to integrate acquired businesses into our operations, realize planned synergies and operate such businesses profitably in accordance with our expectations; the inability of acquired businesses to generate revenues in accordance with our expectations; the impact of healthcare reform legislation and proposals to amend the legislation; changes in Medicare, Medicaid and third party coverage and reimbursements; the impact of enacted tax legislation and related regulations; competitive market conditions and resulting effects on revenues and pricing; increases in raw material costs that cannot be recovered in product pricing; global economic factors, including currency exchange rates, interest rates, trade disputes, sovereign debt issues and international conflicts and hostilities, such as the ongoing geopolitical conflicts between Russia and Ukraine; public health epidemics; difficulties in entering new markets; general economic conditions; and other factors described or incorporated in our filings with the Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K.   We expressly disclaim any obligation to update forward-looking statements, except as otherwise specifically stated by us or as required by law or regulation.

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. © 2022 Teleflex Incorporated. All rights reserved.

Contacts:
Teleflex Incorporated:
Lawrence Keusch Vice President, Investor Relations and Strategy Development

John Hsu, CFA Vice President, Investor Relations

[email protected] 
610-948-2836

References:

1. Salyer, C. E., Thompson, J., Hoffman, A., Burstein, M. D., Enochs, P., Watkins, B. M., Kuethe, J., & Goodman, M. D. (2022). Multisite Study of Titan SGS Stapler in longitudinal gastric resection. Surgical Endoscopy. https://doi.org/10.1007/s00464-022-09051-x
2. Salyer, C., Goodman, M., Kuethe, J., Watkins, B., Enochs, P., Hoffman, A., & Thompson, J. (2021). Multisite Study of Titan SGS Stapler in Longitudinal Gastric Resection.
3. Toro, J., Lin, E., Patel, A., Davis, S., Sanni, A., Urrego, H., Sweeney, J., Srinivasan, J., Small, W., Mittal, P., Sekhar, A., & Moreno, C. (2014 Sept.). Association of Radiographic Morphology with Early Gastroesophageal Reflux Disease and Satiety Control after Sleeve Gastrectomy. Journal of the American College of Surgeons, 219(3), 430–438. https://doi.org/10.1016/j.jamcollsurg.2014.02.036 
4. Salyer, C., Spuzzillo, A., Wakefield, D., Gomaa, D., Thompson, J., & Goodman, M. (2021 July). Assessment of a novel stapler performance for laparoscopic sleeve gastrectomy. Surgical Endoscopy, 35(7), 4016–4021. https://doi.org/10.1007/s00464-020-07858-0 
5. American Society for Metabolic and Bariatric Surgery, Estimate of Bariatric Surgery Numbers, 2011-2020, published June 2022.

Source: Teleflex Incorporated