Teleflex will make an upfront payment of $500m in cash, along with an additional $25m, subject to achieving certain commercial milestones
Teleflex to acquire Z-Medica. (Credit: Narupon Promvichai from Pixabay.)
Healthcare supplies and services company Teleflex has agreed to acquire a privately-held hemostatic products manufacturer Z-Medica for $565m.
Under the terms of the agreement, Teleflex is expected to make an upfront payment of $500m cash at closing, along with an additional $25m, subject to achieving certain commercial milestones.
As part of the transaction, Teleflex has also acquired certain tax attributes which are expected to result in future tax benefits, and the company valued them at around $40m of the purchase price.
The acquisition, subject to certain customary closing conditions, including receipt of certain regulatory approvals, is expected to be closed in the fourth quarter of 2020.
Teleflex intends to fund the transaction by borrowings under its revolving credit facility, and may opportunistically look to term-out the revolving credit facility borrowings through a note offering after the closing of the transaction.
Teleflex chairman, president and chief executive officer Liam Kelly “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.
“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.”
“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.”
Z-Medica serves through QuikClot, Combat Gauze and QuikClot Control+ brands
Z-Medica is engaged in developing hemostatic technologies, which facilitate haemorrhage control with cost-effective, efficient bleeding control solutions.
The company delivers through three primary brands, QuikClot, Combat Gauze and QuikClot Control+, which uses a unique technology that includes gauze impregnated with kaolin. The technology is said to activate and advance the body’s natural clotting ability.
Z-Medica claimed that its QuikClot Control+ is the first hemostatic dressing for temporary control of Class III or Class IV bleeding in the internal organ space.
Also, its products are focused on trauma surgery, EMS, military, emergency department, and interventional segments, and expand into additional indications.
Z-Medica president and CEO Eric Compton 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 haemorrhage 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.”
Guggenheim Securities is serving as financial advisor and Holland & Knight as legal counsel to Teleflex for the transaction while Truist Securities serving as financial advisor and Kirkland & Ellis as legal counsel to Z-Medica.