Tecomet to Acquire Teleflex’s Orthopedics Business
Teleflex Inc. has entered into a definitive agreement to sell its original equipment (OEM) manufacturer orthopedics business to Tecomet for $45.2 million in cash. Majority owner of Tecomet Charlesbank Capital Partners financed the transaction. The OEM orthopedics business generated net revenues of approximately $36 million for Teleflex in 2011.
"The decision to divest the OEM orthopedics business is consistent with our strategy to focus on our branded products, invest in late-stage innovative technologies to support our long-term growth, and expand both our gross and operating margins," stated Benson F. Smith, Teleflex chairman, president and CEO. "The proceeds from the divestiture of this business, along with our ability to continue to generate cash from operations, will enable us to continue to execute our strategic plan for future growth."
Teleflex’s orthopedics business includes the Beere Medical and SMD brand product lines. Beere offers custom surgical instruments used for orthopedic and spinal procedures, while SMD makes micro-machined products ranging from simple components to complex devices. Core capabilities include implant systems (spinal, small bone, dental), mono- and poly-axial screws, flat or anatomic plates, straight or pre-bent rods, connectors and implant insertion instruments.
“We are very excited about the additional capabilities this acquisition adds to our portfolio and we welcome the talented and capable Kenosha, Wisconsin workforce to the Tecomet team,” said Tecomet’s CEO Bill Dow.
The transaction is subject to customary closing conditions and is expected to close during the third quarter of 2012. As a function of entering into a definitive agreement, Teleflex will reclassify the OEM orthopedics business under “discontinued operations” in its future consolidated financial statements.
After the acquisition is finalized, the Teleflex Medical OEM division will focus its attentions on expanding its Deknatel (a line of sutures) and TFX OEM (custom extrusion, catheter fabrication, and medical devices) brands.
Based in Limerick, Pa., Teleflex produces products for the critical care market.