Interview – Serial acquirer Teleflex seeks deals both big and small

Teleflex is a curious company. It has closed two megamergers this year in very different segments of the market, and now finds itself an extremely diversified medtech group where most of its peers in terms of market cap specialise in one area. And while it is certainly on the hunt for further M&A deals, it has no intention of narrowing its focus.

“We consider ourselves to be a sort of serial acquirer,” Jake Elguicze, Teleflex’s vice-president of investor relations, tells EP Vantage. “We continue to be interested in adding to our portfolio in the vascular, anaesthetic, surgical and interventional areas, and maybe a little bit so in respiratory care.”

Teleflex is in fact more specialised than it used to be. Founded in 1943 as a maker of a single component of the Spitfire fighter plane, it has over the decades been involved in the automotive, marine and plastics extrusion moulding sectors, among others. Over the last decade or so, however, the company has divested its non-healthcare operations and become pure-play medtech, though it is playing in many areas.

Scale vs tuck-in

So far this year it has added two companies in two very different sectors. Its $1bn acquisition of Vascular Solutions closed in February and brought in various catheters, guidewires and other coronary and peripheral vascular devices. And this month it integrated Neotract, which despite essentially being a one-product company – it makes UroLift, tiny implants that treat benign prostatic hyperplasia by holding the prostate lobes apart to relieve compression on the urethra – was apparently worth $1.1bn.

Mr Elguicze says the company views these buys as scale-builders, and points to its takeovers of Vidacare and LMA International as other examples – though these were much smaller deals, neither worth more than $300m.

“Whenever we look at an acquisition we want to make sure it fits into our existing business units,” Mr Elguicze says. “We are not interested in getting involved in markets where it would be adding an entirely new vertical and wouldn’t allow for synergies.”

Teleflex had a vascular device portfolio with sales of around $170m a year before the Vascular Solutions deal; adding the new business doubled it. The situation with Neotract was similar – Teleflex’s global urology revenues were $160m prior to the acquisition.

But Neotract had sales of just $51m in 2016, making the purchase price look pretty generous. Mr Elguicze says it is justified by the company’s sales trajectory: revenues grew 178% from 2015 and should hit $115-$120m in the coming year.

Teleflex: 14 M&A deals in the past five years
Date Target Value   ($m) Target focus
Oct 2, 2017 Neotract 1,100 Urology
Apr 3, 2017 Pyng Medical 9 Drug delivery; obstetrics & gynaecology
Feb 17, 2017 Vascular Solutions 1,000 Cardiology; general hospital & healthcare supply; wound management
Jan 11, 2016 Nostix - Drug delivery
Dec 31, 2015 Truphatek International - Endoscopy
Dec 31, 2014 Mini-Lap Technologies - General & plastic surgery
Dec 2, 2013 Vidacare 263 Drug delivery; general & plastic surgery; patient monitoring
Sep 30, 2013 Innolap Surgical - Endoscopy; general & plastic surgery
Jun 11, 2013 Ultimate Medical - Anaesthesia & respiratory
Jun 6, 2013 Eon Surgical 40 Endoscopy; general & plastic surgery
Oct 23, 2012 LMA International 292 Anaesthesia & respiratory
Jul 18, 2012 Hotspur Technologies 15 Cardiology; drug delivery
Jun 25, 2012 Semprus Biosciences 30 Drug delivery; in vitro diagnostics
May 3, 2012 Axiom Technology Partners 8 Endoscopy
Source: EvaluateMedTech

As well as deals to help it bulk up, Teleflex does tuck-in acquisitions, and here it follows textbook rules.

“We will do smaller product-oriented acquisitions – we refer to them as technology acquisitions. The company might have very little revenue, but it may have just received some type of regulatory approval, whether a CE mark or a 510(k),” says Mr Elguicze. Nostix, for example, received FDA clearance for Picc, a device to aid catheter placement, in October 2015; Teleflex bought it the following January.

Mr Elguicze adds that whether the deal is big or small, it is vital that the products Teleflex obtains must provide not only a clinical but a cost benefit to the customer, usually a hospital – about 85% of the group’s $2bn revenues come from products sold directly to hospitals.


It is more than possible that Teleflex itself might be a takeover target. The one obvious lookalike group – a diverse, single-use device, hospital-focused business in the $10-20bn market cap range – was C. R. Bard. Bard was bought by Becton Dickinson for $24bn this spring (The return of medtech scale-building?, April 24, 2017).

The immediate upshot is that Teleflex now competes with a plethora of groups in different therapy areas. It is up against BD in the vascular area thanks to the Bard deal, and against BD again in respiratory since BD bought Carefusion back in 2015.

In the surgical area Teleflex tries to carve out niches, Mr Elguicze says, rather than going head-to-head with the likes of J&J or Medtronic. “We try and focus those efforts on laparoscopic procedures, a few hundred million-dollar markets where there really isn’t a good competitor.”

Longer term, the BD-Bard deal might provide a model for a potential purchase of Teleflex. Mr Elguicze denies that there is a defensive angle to the company’s recent scale-building, instead suggesting the opposite.

“Given the way the company has changed over the years, certainly following the acquisitions of Vascular Solutions and Neotract, and our ability to grow organically in the mid-to-upper single-digit range for the next several years, I’m sure that we’re potentially a target for larger players.”

Still, Mr Elguicze states that a trade sale is not Teleflex’s endgame strategy. Rather it intends to be the buyer, not the bought, and has no intention of throttling back its aggressive attitude to acquisitions. Smaller companies in the vascular, anaesthetic, surgical, interventional and respiratory areas – in other words, half the medtech industry – might want to keep an ear out for Teleflex’s call.

To contact the writer of this story email Elizabeth Cairns in London at [email protected] or follow @LizVantage on Twitter.

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