Dive Brief:
- Teleflex said it struck an agreement on Monday to acquire closely held Standard Bariatrics for $170 million in cash. It could pay up to $130 million more if the company reaches certain commercial milestones.
- Cincinnati-based Standard Bariatrics makes a surgical stapler and other products for bariatric surgery. It would add to Teleflex’s portfolio of surgical devices, including products for interventional cardiology, urology and vascular access.
- The deal is expected to close in the fourth quarter of 2022, subject to regulatory approval.
Dive Insight:
Teleflex said it will fund the purchase with money borrowed under its revolving credit facility.
The deal is expected to immediately add to Teleflex’s revenue growth and boost the company’s gross margins in the long term, CEO Liam Kelly said in a statement.
Standard isn’t expected to contribute “meaningfully” to Teleflex’s revenue this year, while it’s projected to contribute $30 million to $35 million next year. For 2021, Teleflex reported revenue of $2.8 billion, an 11% increase over 2020.
Kelly said the acquisition would add an “exciting and differentiated” product serving the sleeve gastrectomy market, which the company estimates as 120,000 procedures 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,” Kelly said.
Standard Bariatrics launched its surgical stapler, the Titan SGS, in the third quarter of 2021. It offers a continuous staple line of 23 centimeters, which the company says can help surgeons achieve more consistent results. Standard Bariatrics is forecast to bring in about $15 million in revenue for 2022, Teleflex said in the statement.
