Conductor deal sets the tempo for Teleflex

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Teleflex’s contract manufacturing business is neither its biggest nor its fastest-growing unit, but a $260m tuck-in acquisition could give it a lift. The diversified company paid cash for IWG High Performance Conductors, the market leader in insulated ultra-fine wires and micro-diameter tubing – components used in the fields of electrophysiology, other vascular technologies and pain management. As such IWG should be complementary to Teleflex’s OEM segment, but unlike that business it is growing at double-digit rates. It also carries operating margins in excess of Teleflex’s own, which are themselves at an all-time high of 27%, chief financial officer Thomas Powell said on the group’s quarterly call yesterday. There could be many more deals to come, quite possibly this year: the group's chief exec, Liam Kelly, said Teleflex had the capacity for more M&A on its balance sheet, and that acquisitions was the preferred option for capital deployment. It will have to: sales growth of one of its main products, the UroLift prostate implant, is forecast to slow despite a planned marketing blitz, and sterilisation facilities and the coronavirus outbreak are also expected to drag on revenues.

Teleflex
  Annual sales ($m)  
Segment 2019 2020e 2022e 2024e CAGR
Vascular, anaesthesia, urology & critical care 1,223 1,338 1,582 1,827 +8%
Interventional cardiology 430 470 556 641 +8%
Surgical care 370 381 414 446 +4%
Devices for original equipment manufacturers 220 232 257 281 +5%
Other 352 359 374 390 +2%
Total company revenues 2,595 2,780 3,182 3,585 +7%
Source: EvaluateMedTech.     

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