Teleflex Uses M&A to Strengthen Urology PortfolioTeleflex Uses M&A to Strengthen Urology Portfolio

Teleflex is set to acquire Palette Life Sciences AB for about $600 million and up to $50 million in milestones. The deal would boost the Wayne, PA-based company's urology portfolio.

The deal is slated to be completed in 4Q23.

Palette has developed the Barrigel, a biodegradable sculptable rectal spacer. The device is designed to reduce radiation delivered to the rectum during prostate cancer radiation therapy while increasing tumor control and patient quality of life.

It received FDA clearance in May 2022, is cleared for marketing in Australia, and is CE Marked.

“The original founding vision for Palette Life Sciences was to disrupt the rectal spacing market with a new product innovation that would serve as a better option for doctors and their patients,” Travis Gay, Chief Commercial Officer and co-Founder of Palette Life Sciences said in a release. “As a result, Palette would achieve strong market growth and expansion, creating high value for patients and shareholders alike. Entering into the agreement with Teleflex serves as an important milestone in achieving our vision.”

Stockholm Sweden-based Palette is estimated to generate net sales of approximately $56 million, on a standalone basis, in 2023. 

“As part of our strategy to deliver long-term durable growth, Teleflex is focused on deploying capital for 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, said in a release. “The acquisition of Palette Life Sciences will allow us to incorporate this exciting technology into our Interventional Urology business unit and bring urologists, radiation oncologists, and other specialists more innovative technologies that can positively impact patient care. The transaction is consistent with our strategy to acquire assets that are accretive to Teleflex’s growth rate. We expect the acquisition will be immediately accretive to adjusted gross margin and will enhance our adjusted operating margin in the near term. We believe Palette Life Sciences will be a meaningful contributor to our growth in the coming years. In 2024, we expect this business will achieve year-over-year revenue growth in the high-teens to low 20% range, which gives us further confidence in our ability to deliver on our 2023-2025 LRP financial objectives.”

Teleflex has been involved in a few recalls, lately.

 Earlier this month, the company’s Arrow International subsidiary recalled the Arrow Endurance Extended Dwell Peripheral Catheter System.

And in June, the company announced a global recall affecting batches of its Rüsch endotracheal tube products.