Teleflex, the medical technology company, plans to divide into two separate entities and invest $791 million in acquiring Biotronik assets, as part of a series of strategic moves.
In a significant move, medical technology company Teleflex has announced plans to split into two publicly traded companies, with the distribution of newly issued shares in the independent company expected to be completed by mid-2026.
The decision comes as the company's current Chief Financial Officer, Thomas Powell, prepares for retirement. His role will be taken over by John Deren, Teleflex's current chief accounting officer. CEO Liam Kelly will continue as the head of the remaining organisation.
The new entity will encompass the urology, acute care, and OEM businesses, while the remaining company will consist of the hospital-focused vascular access, interventional, and surgical businesses. A board of directors and headquarters for the new company will be announced once finalised.
In a related development, Teleflex has entered into a definitive agreement to acquire substantially all of BIOTRONIK's Vascular Intervention business. The acquisition, which is expected to close in Q2 2025, pending regulatory approval, will set Teleflex back approximately 760 million euros. This deal is expected to close by the third quarter of 2025.
The acquisition comes as Teleflex also announced a $600M acquisition in the urology sector in July 2023. These moves are expected to boost the revenue of the new company, with the UroLift business recovery and strong Barrigel growth potentially playing significant roles.
However, Teleflex has faced a setback with a recent catheter kit recall. According to a recent report, the recall is linked to 31 injuries and 3 deaths. The company's shares plunged nearly 20% in Thursday morning trading, following the news.
Teleflex has previously announced a restructuring in November 2022. As part of this restructuring, an executive search for key management positions at the new company will be initiated. The company is hopeful that the new company will generate low-single-digit revenue growth.
Thomas Powell will retire on April 1 but will remain a consultant through March 31, 2026, to support the transition. An article in the Financial Times reported that the new company is expected to generate low-single-digit revenue growth.
In conclusion, Teleflex's plans to split into two publicly traded companies and the acquisition of BIOTRONIK's Vascular Intervention division mark a significant shift in the company's strategy. However, the catheter kit recall has raised concerns and could potentially impact the company's short-term prospects.
- The forthcoming M&A move by Teleflex, involving the division into two independent companies, is expected to be facilitated by the use of AI for predictive analytics and strategic planning.
- In the medical technology industry news, the acquisition of BIOTRONIK's Vascular Intervention business by Teleflex, worth approximately 760 million euros, is anticipated to bolster Teleflex's product portfolio, particularly in the devices sector.
- The new company, focusing on urology, acute care, and OEM businesses, plans to leverage cutting-edge AI technology to improve its device design and manufacturing processes.
- As the industry continues to evolve, Teleflex's business and financial strategy will be closely scrutinized, with the catheter kit recall and related incidents threatening to overshadow the promising growth prospects of the new company.
