On Thursday, Teleflex Incorporated (NYSE:TFX) will pursue a plan to separate into two new, independent, publicly traded companies:
- New, independent, publicly traded company (NewCo) consisting of Teleflex’s Urology, Acute Care, and OEM businesses.
- RemainCo will consist of Teleflex’s Vascular Access, Interventional, and Surgical businesses, focusing on high-growth, high-acuity, primarily hospital-focused emergent end markets.
The separation is expected to be completed by mid-2026.
“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,” said Liam Kelly, Teleflex’s Chairman, President, and CEO.
RemainCo had approximately $2.1 billion in revenue in 2024.
Concurrently, Teleflex agreed to acquire the Vascular Intervention business of Biotronik SE & Co. KG for approximately 760 million euros ($791.6 million). The acquisition is expected to be completed by the end of the third quarter of 2025.
RemainCo is expected to generate constant currency revenue growth of over 6%. RemainCo will have a simplified and nimble operating model with a streamlined manufacturing footprint, transitioning from 19 manufacturing facilities anticipated at Teleflex as of year-end 2025 to 7 facilities at RemainCo post-separation, with the remaining 12 expected to transfer to NewCo.
The transaction is also expected to be accretive to EPS growth, with RemainCo anticipated to deliver double-digit EPS growth in the first full year following the separation.
NewCo, with approximately $1.4 billion in revenue in 2024, is also expected to benefit from a simplified operating model. NewCo is expected to generate low-single digit constant currency revenue growth with a mid-50% adjusted gross margin profile.
Teleflex will initiate an executive search for key management positions at NewCo shortly.
Teleflex also reported fourth-quarter sales of $795.4 million, up 2.8% year over year (+3.2% on constant currency), missing the consensus of $813.23 million. The medical devices company reported adjusted EPS of $3.89, beating the consensus of $3.86.
Guidance: Teleflex expects 2025 revenue growth of (0.4)% to 0.7%, with adjusted EPS of $13.95-$14.35 versus consensus of $15.23.
Price Action: TFX stock is down 21.6% at $139.35 at the last check Thursday.
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