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Teleflex to draw down on revolver to finance Palette acquisition
By Wendy Van Sickle
Columbus, Ohio, July 26 – Teleflex Inc. plans to draw down on its revolving credit facility to fund a portion of the purchase price of its acquisition of Palette Life Sciences AB, according to a news release Wednesday.
Teleflex entered into a definitive agreement to acquire the medical device company for an upfront cash payment of $600 million at closing, and up to an additional $50 million upon the achievement of certain commercial milestones.
The acquisition is expected to expand the Teleflex interventional urology portfolio.
“The transaction is consistent with our strategy to acquire assets that are accretive to Teleflex’s growth rate,” Liam Kelly, chairman, president and chief executive officer of Teleflex, said in the release. “We expect the acquisition will be immediately accretive to adjusted gross margin and will enhance our adjusted operating margin in the near term.
“We believe Palette Life Sciences will be a meaningful contributor to our growth in the coming years. In 2024, we expect this business will achieve year-over-year revenue growth in the high-teens to low 20% range, which gives us further confidence in our ability to deliver on our 2023-2025 LRP financial objectives.”
Assuming a Dec. 1 close, the transaction is expected to be dilutive to the company’s adjusted earnings per share, excluding non-recurring purchase accounting items and other acquisition and integration related costs, in 2023 and 2024 by approximately $0.15 and $0.35, respectively.
Cash on hand will also be used to finance the acquisition.
Teleflex is a Wayne, Pa.-based provider of medical technologies.
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