Teleflex to Acquire Market Leader in Hemostatic Products
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.To get more news about Bleeding Control Products, you can visit rusunmedical.com official website.
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.
