WAYNE, PA — Teleflex Incorporated (NYSE: TFX) has announced plans to separate its Urology, Acute Care, and OEM businesses into a standalone, publicly traded company, “NewCo.” The decision, approved by the Board of Directors, reflects Teleflex’s strategy to streamline operations and sharpen its focus on high-growth, hospital-oriented markets. The transition is expected to be tax-free for U.S. shareholders and completed by mid-2026.
Positioning for Strategic Growth
The spin-off creates two purpose-driven companies. Teleflex RemainCo will concentrate on its Vascular Access, Interventional, and Surgical businesses, targeting faster growth in high-acuity hospital markets. Post-separation, RemainCo is anticipated to achieve over 6% constant currency revenue growth, higher adjusted gross margins, and double-digit EPS growth in its first full year as a streamlined operation.
Liam Kelly, Chairman, President, and CEO, stated, “The decision to pursue this separation was driven by our active portfolio management process and focus on driving shareholder value. Following the separation, RemainCo will be well-positioned to accelerate growth in attractive, primarily hospital-focused, emergent end markets, with a simplified operating model, streamlined manufacturing footprint, and increased management focus.”
NewCo, with estimated 2024 revenue of $1.4 billion, will focus on Urology, Acute Care, and OEM markets, boasting leading products such as the UroLift® System and Barrigel®. NewCo will aim for operational efficiency and targeted investments to unlock its full growth potential.
RemainCo’s Optimized Focus
With $2.1 billion in pro forma 2024 revenue, Teleflex RemainCo will focus on three core categories:
- Vascular Access: Products like catheters and intraosseous systems designed for critical care applications.
- Interventional: Cardiac and vascular solutions, bolstered by the recently acquired BIOTRONIK Vascular Intervention portfolio.
- Surgical: Instruments such as ligating clips and powered staplers used across a range of procedures.
RemainCo’s operational efficiency will be enhanced by cutting its manufacturing footprint from 19 to seven facilities, channeling resources into R&D and innovative projects. The company plans to support its hospital-focused growth strategy by allocating capital toward high-ROI initiatives, acquisitions, and shareholder returns.
NewCo’s Growth Potential
NewCo’s portfolio will include:
- Urology: Leading technologies such as the UroLift® System and bladder management solutions under the Rüsch® brand.
- Acute Care: Products for anesthesia, pain management, and respiratory care.
- OEM: Custom devices and components for other medical manufacturers.
Initially projected to grow in the low single-digit range, NewCo will target improvement in growth rates by leveraging focused investments, recovering key markets, and expanding its customer base.
Financial and Transaction Details
The transaction is expected to be accretive to RemainCo’s adjusted gross margin and minimally impact operating margins at the onset. Long-term value creation is anticipated as both entities unlock their tailored strategies. The transition is contingent on regulatory approvals, tax rulings, and final board consent.
With a clear vision for the future, this move positions Teleflex to maximize value creation, stimulate innovation, and better meet the needs of patients and customers across its markets.
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