Significantly advances Teleflex’s offering
of vascular and interventional solutions
Provides differentiated, high-growth and
high-margin product offerings with demonstrable clinical
benefits
Compelling financial profile that
substantially improves Teleflex’s revenue growth, margins, earnings
and cash flow generation capabilities
Company to host conference call at 8am
ET
Teleflex Incorporated (NYSE: TFX) (the “Company”) and Vascular
Solutions, Inc. (NASDAQ: VASC), today announced that the companies
have entered into a definitive agreement under which Teleflex will
acquire Vascular Solutions in a transaction valued at approximately
$1.0 billion. Under the terms of the agreement, Teleflex will
acquire all of the issued and outstanding shares of Vascular
Solutions common stock for $56.00 per share, in cash. The Boards of
Directors of both Teleflex and Vascular Solutions have unanimously
approved the transaction. This transaction is subject to the
approval of Vascular Solutions’ shareholders and the satisfaction
of customary closing conditions and is expected to close during the
first half of 2017.
Founded in 1997, Vascular Solutions is an innovative medical
device company that focuses on developing clinical solutions for
minimally invasive coronary and peripheral vascular procedures. The
company’s product line consists of more than 90 proprietary
products and services that are sold to interventional
cardiologists, interventional radiologists, electrophysiologists
and vein specialists through its direct U.S. sales force and
international independent distributor network. The combination is
expected to meaningfully accelerate the growth of Teleflex’s
vascular and interventional businesses through increased revenue
associated with entry into the coronary and peripheral vascular
market, as well as increased cross-portfolio selling opportunities
to both Teleflex and Vascular Solutions customer bases.
“We are extremely excited to announce this definitive agreement
with Vascular Solutions, as it represents a significant step
forward in our strategy,” said Benson Smith, Chairman and Chief
Executive Officer of Teleflex. “Vascular Solutions is a truly
unique company with differentiated technologies serving the
coronary and peripheral vascular markets. They have a demonstrated
long-standing track record of delivering double-digit annual
revenue growth, stemming from organically developed, patented
products that address unmet clinical needs in high-value procedure
categories. In addition, they have established a strong franchise
focused on interventional cardiology and interventional radiology
which complements Teleflex’s existing businesses. Importantly,
while we believe Vascular Solutions has compelling growth
opportunities as they continue to build their business with their
existing product portfolio, we look forward to potential
longer-term tailwinds as we benefit from their robust R&D
pipeline and our international distribution network moving
forward.”
Added Smith, "Similar to Vidacare and LMA, this transaction
represents an opportunity to acquire a company that meets our key
M&A objectives, which include obtaining a product portfolio
that fits into our existing strategic business unit franchises and
call points, thereby allowing for synergy generation; products that
provide a superior clinical benefit to existing alternatives and a
cost benefit to hospitals; long product life cycles that benefit
from patent protection; and the ability to further improve our
financial profile. This transaction also bolsters Teleflex’s
leadership and management team with the additions of key members of
the Vascular Solutions leadership team who will be instrumental in
continuing to drive the business forward. For Teleflex
shareholders, we expect this transaction to create value by
generating attractive financial returns fueled by incremental
revenue growth and accretion to our adjusted margins1 and adjusted
earnings per share1 beginning in 2017.”
Howard Root, Chief Executive Officer of Vascular Solutions said,
“We are delighted with this combination, which will further improve
our commitment to coronary and peripheral vascular care by
providing greater access to our innovative product offerings for
patients around the world, while offering our shareholders
immediate value. We have tremendous respect for the Teleflex team,
who share our commitment to patients and providers worldwide. We
look forward to working closely with the Teleflex team to achieve a
smooth transition.”
STRATEGIC AND FINANCIAL BENEFITS AND TRANSACTION
DETAILS
Expands Teleflex’s Product Portfolio: The addition of
Vascular Solutions will greatly enhance Teleflex’s presence in the
interventional cardiology, interventional radiology, and peripheral
vascular markets. The combined company will offer more than 150
cardiac, vascular, and interventional access products.
Accelerates Teleflex’s Sales Growth Trajectory And Provides
Significant Opportunity To Capitalize On Existing Sales
Channel: Vascular Solutions is a global leader in the coronary
and peripheral vascular markets and has consistently generated
greater than ten percent revenue growth per year. This acquisition
positions Teleflex to enter new, fast-growing markets while also
enhancing Vascular Solutions revenue growth and reach by
capitalizing on Teleflex’s international presence and distribution
network.
Improves R&D Pipeline: Teleflex is committed to
bringing innovative new products to market that improve patient and
provider safety, while correspondingly reducing procedure costs.
Vascular Solutions has a robust pipeline of new and next-generation
products that address complex interventions, radial artery
catheterizations and embolization procedures. Since launching their
initial product, Vascular Solutions has created and developed over
100 new medical devices which have been sold to and used by
interventional physicians.
Financial Rationale: This transaction is expected to
create value for Teleflex shareholders and to be accretive to
adjusted earnings per share in 20171, including the impact of
incremental interest expense associated with financing the
transaction. The Company expects the acquisition to provide
approximately $0.50 in adjusted earnings per share1 accretion in
fiscal year 2018 (first full fiscal year post-close) and to be
increasingly accretive thereafter. The Company anticipates
generating synergies of between $40 million to $45 million by
fiscal year 2019 (second full fiscal year post-close). The
acquisition is expected to generate a return on invested capital
that meets the Company’s cost of capital in the fourth year and
comfortably exceeds the Company’s cost of capital in the fifth
year.
Financing: Teleflex has obtained a commitment letter from
JPMorgan Chase Bank, N.A. for a new $750 million senior unsecured
bridge facility in connection with the planned acquisition.
Teleflex plans to finance the acquisition at closing through a
combination of availability under its revolving credit facility and
a new senior secured term loan facility. Following consummation of
the transaction, Teleflex may look to opportunistically issue
senior unsecured notes, the proceeds of which will be used to
either repay borrowings under the revolving credit or the new
senior secured term loan facilities. Over the long-term, Teleflex
intends to maintain its debt to adjusted EBITDA (as calculated in
accordance with the terms set forth in the Company’s existing
Credit Agreement) at approximately 3.0x.
Transaction Structure, Approvals and Time to Closing: The
transaction is structured as a merger in which Teleflex will
acquire all of the outstanding shares of Vascular Solutions at a
price of $56.00 per share. The transaction is expected to close in
the first half of 2017 and is subject to approval by Vascular
Solutions’ shareholders, the expiration or termination of
applicable waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and other customary closing
conditions.
ADVISORS
J.P. Morgan Securities LLC is acting as financial advisor to
Teleflex and Simpson Thacher & Bartlett LLP is serving as legal
counsel.
Guggenheim Securities is acting as financial advisor to Vascular
Solutions and Dorsey & Whitney is serving as legal counsel.
CONFERENCE CALL & WEBCAST
Teleflex will host a conference call and webcast today, December
2, 2016 at 8:00 AM Eastern Time to discuss the transaction. The
call will be available live and archived on the company’s website
at www.teleflex.com and the accompanying presentation will be
posted prior to the call. The conference call can be accessed live
by dialing 855-385-6236 (U.S./Canada) or 503-343-6058
(International), Passcode: 31448476. An audio replay will be
available until January 1, 2017 at 11:59pm (ET), by calling
855-859-2056 (U.S./Canada) or 404-537-3406 (International),
Passcode: 31448476.
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 and interventional access, surgical, anesthesia,
cardiac care, urology, emergency medicine 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®, Rusch® and Weck® - trusted brands united by a common
sense of purpose.
ABOUT VASCULAR SOLUTIONS
Vascular Solutions, Inc. is an innovative medical device company
that focuses on developing unique clinical solutions for coronary
and peripheral vascular procedures. The company’s product line
consists of more than 90 products and services that are sold to
interventional cardiologists, interventional radiologists,
electrophysiologists and vein specialists through its direct U.S.
sales force and international independent distributor network. All
listed trademarks are the property of Vascular Solutions, Inc.
(1) Adjusted margins and adjusted earnings per share exclude
specified items such as amortization of acquired intangibles,
inventory step-up, restructuring costs and other costs incurred to
execute the transaction. Adjusted margins and adjusted earnings per
share are non-GAAP financial measures and should not be considered
replacements for GAAP results.
CAUTION CONCERNING FORWARD-LOOKING INFORMATION
This press release contains forward-looking statements,
including, but not limited to, statements related to expected
benefits to Teleflex from the acquisition, including acceleration
of revenue growth, anticipated accretion to adjusted margins and
adjusted earnings per share and longer-term benefits resulting from
Vascular Solutions’ R&D pipeline and Teleflex’s international
distribution network; expected transaction synergies; expectations
with respect to return on invested capital resulting from the
acquisition; Teleflex’s expectations with respect to its long-term
debt to adjusted EBITDA levels; and anticipated timing for closing
of the transaction. Actual results could differ materially from
those in the forward-looking statements due to, among other things,
the failure of Vascular Solution’s shareholders to approve the
transaction and the possibility that the acquisition does not
close; unanticipated costs and length of time required to comply
with legal requirements and regulatory approvals applicable to the
transaction; unanticipated difficulties and expenditures in
connection with integration programs; customer and shareholder
reaction to the transaction; risks associated with the financing of
the transaction; disruption from the transaction making it more
difficult to maintain business and operational relationships;
significant transaction costs; unknown liabilities; the risk of
litigation and/or regulatory actions related to the proposed
acquisition; changes in general and international economic
conditions, including fluctuations in foreign currency exchange
rates and the impact of the United Kingdom's vote to leave the
European Union; and other factors described or incorporated in our
filings with the Securities and Exchange Commission (“SEC”),
including our Annual Report on Form 10-K for the year ended
December 31, 2015.
ADDITIONAL INFORMATION
In connection with the proposed transaction, Vascular Solutions
will file with the SEC and mail or otherwise provide to its
stockholders a proxy statement regarding the proposed transaction.
BEFORE MAKING ANY VOTING DECISION, VASCULAR SOLUTION’S SHAREHOLDERS
ARE URGED TO READ THE PROXY STATEMENT IN ITS ENTIRETY WHEN IT
BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN
CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE
THEREIN BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain these
documents free of charge at the SEC’s website, www.sec.gov, or from
Vascular Solutions at its website, www.vasc.com, or by contacting
Phil Nalbone at (763) 656-4371.
PARTICIPANTS IN SOLICITATION
Vascular Solutions and its directors and executive officers are
participants in the solicitation of proxies from Vascular
Solutions' shareholders with respect to the proposed acquisition.
Information regarding the interests of such individuals in the
proposed acquisition of Vascular Solutions by Teleflex will be
included in the proxy statement relating to such acquisition when
it is filed with the SEC. You may obtain information about Vascular
Solutions' directors and executive officers in Vascular Solutions'
definitive proxy statement for its 2016 annual meeting of
stockholders, which was filed with the SEC on March 25, 2016.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161202005163/en/
Teleflex IncorporatedJake ElguiczeTreasurer and Vice President
of Investor Relations610-948-2836
Teleflex (NYSE:TFX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Teleflex (NYSE:TFX)
Historical Stock Chart
From Apr 2023 to Apr 2024