Teleflex it has entered into a definitive agreement to acquire Standard Bariatrics for an upfront cash payment of US$170 million at closing, with additional consideration of up to US$130 million payable upon the achievement of certain commercial milestones. The acquisition is subject to customary closing conditions, including receipt of certain regulatory approvals, and is expected to be completed early in the fourth quarter of 2022.
Standard Bariatrics have developed the Titan SGS offers surgeons the longest continuous staple cutline of 23cms in sleeve gastrectomy procedures, the first-of-its-kind stapler that may help users achieve more consistent and symmetrical sleeve pouch anatomy, setting their patients up for optimised outcomes. While every patient's anatomy is different, the Titan SGS long staple line enables surgeons to plan and place staples in one firing, minimising variations sometimes associated with the use of multiple overlapping short-cartridge staple firings. Additionally, the design may result in a more secure staple line and fewer chances of leaks, as evidenced with higher burst pressures.
“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,” said Liam Kelly, Chairman, President and Chief Executive Officer. “The acquisition of Standard Bariatrics adds an exciting and differentiated product serving the large and growing sleeve gastrectomy market, which we estimate to be approximately 120,000 procedures annually in the US. 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.”
The Titan SGS was commercially launched in the third quarter of 2021. Standard Bariatrics’ revenues for 2022 are expected to be approximately US$15 million.
“We are excited to enter into this transaction, which we expect to be immediately accretive to Teleflex’s revenue growth and also enhance our gross margin profile over time,” Kelly added. “We also expect that the acquisition will exceed our cost of capital by the end of the fourth year following the completion of the acquisition.”