Life Sciences Insight

Teleflex Strengthens Position in Bariatric Surgery with Acquisition

The Wayne, PA-based company is set to acquire Standard Bariatrics for $170 million.

Teleflex announced a definitive agreement to acquire bariatric surgery technology provider, Standard Bariatrics. The company is known for its bariatric stapling technology, the Titan SGS. Teleflex will acquire the company with an upfront payment of $170 million at closing, with an additional consideration of up to $130 million payable upon achievement of specific commercial milestones.

The Titan SGS offers surgeons a continuous staple cutline of 23 centimeters in sleeve gastrectomy, which enables the surgeon to plan and place the staples in one device firing. The use of this technology minimizes variations sometimes seen with the use of multiple overlapping short-cartridge staple firings and may result in a more secure staple line with fewer chances of leaks.

To do this, the technology uses longitudinal graduated stapling with localized tissue compression zones and larger anvil staple pockets. The device is also constantly assessing tissue thickness to ensure optimal stapling parameters and uses six rows of staples with each successive vertical row being longer to match the entire length of the staple line to be closer to the thickness of a patient’s anatomy. Additionally, closed staple height — 1.2 mm to 2.2 mm — is identified along the length of the jaws of the device to allow for surgeons to position gastric tissue thickness appropriately and respect key anatomical landmarks.

“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 CEO of Teleflex. “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.”

Teleflex and Standard Bariatrics are expected to complete the acquisition in the fourth quarter of this year, subject to customary closing conditions including receipt of certain regulatory approvals. Teleflex plans to finance the acquisition through borrowings under its revolving credit facility.

“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 said. “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.”