Teleflex
(NYSE: TFX)
announced today that it plans to separate its Urology, Acute Care and OEM businesses into a new publicly traded company.
The company’s board authorized management to pursue a plan to separate the businesses via a distribution of newly issued shares of “NewCo” to shareholders that is tax-free for U.S. tax purposes.
NewCo consists of the soon-to-be separated businesses. “RemainCo” includes the Teleflex Vascular Access, Interventional and Surgical businesses. It expects to complete the transaction in mid-2026.
Liam Kelly, Teleflex chair, president and CEO, will continue to lead RemainCo in the same positions. Teleflex intends to initiate an executive search for key management positions at NewCo shortly. It also expects to announce the board of directors, management and headquarters as it finalizes them.
“The decision to pursue this separation was driven by our active portfolio management process and focus on driving shareholder value,” said Kelly. “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. We expect RemainCo to have increased flexibility to invest in and better compete in the markets in which it will operate with a focus on enhanced innovation. We believe NewCo will also emerge poised to deliver greater value via its enhanced ability to identify, invest in, and capitalize on the opportunities unique to its end markets. This transaction is designed to optimize the positioning of both companies in order to better meet the needs of patients and customers and maximize value for shareholders.”
Along with this news, news of an acquisition of assets from Biotronik and the company’s fourth-quarter earnings report all releasing this morning, shares of TFX fell more than 20% to $141 apiece by midday trading today.
More about RemainCo
Teleflex RemainCo aims to sharpen its focus on high-growth, high-acuity end markets, particularly in the hospital setting. It registered approximately $2.1 billion in 2024 revenue (pro forma with its announced acquisition of Biotronik’s Vascular Interventions business).
Products include the Arrow branded catheters, catheter navigation and tip positioning systems and intraosseous access systems. After the separation, Vascular Access will include emergency medicine, including hemostatic products. Interventional also includes the assets brought over in the Biotronik deal.
Following separation, Teleflex expects RemainCo to generate constant currency revenue growth of more than 6%. Its simplified, nimble operating model features a streamlined manufacturing footprint, the company says. That means a transition from 19 manufacturing facilities at Teleflex at year-end 2025 to seven facilities post-separation. It expects the remaining 12 to transfer to NewCo.
More on NewCo
NewCo registered about $1.4 billion in 2024 revenue. Teleflex also expects this business to benefit from a simplified operating model, plus increased management focus.
The company expects better positioning to identify, invest in and capitalize on opportunities unique to its businesses.
Key urology brands include the UroLift minimally invasive technology and Barrigel, a hyaluronic acid gel-based rectal spacing product. This portfolio also includes the Rüsch brand of catheters and bladder management products.
Acute Care includes the majority of Teleflex’s anesthesia product category and its respiratory product category. It also features a portfolio of intra-aortic balloon pumps along with other products.
OEM focuses on the design, manufacture and supply of devices and instruments for other medical device manufacturers. it specializes in custom extrusions, micro-diameter film-cast tubing, diagnostic and interventional catheters, balloons and balloon catheters, film-insulated fine wire, coated mandrel wire, conductors, sheath/dilator introducers, specialized sutures and performance fibers, bioabsorbable sutures, yarns and resins.
After the separation, Teleflex expects low-single-digit constant currency revenue growth for NewCo.
A look at the acquisition of Biotronik’s Vascular Interventions division
Biotronik today said it agreed to divest the VI division to Teleflex for about €760 million (approximately $795 million). Rumors began swirling late last year that Teleflex had interest in the business at the German medtech company. They now target a close of the deal in the third quarter of 2025.
Biotronik said the move reflects its commitment to active implantable devices. The VI business, meanwhile, features products like the Orsiro drug-eluting stent, Pantera Lux drug-coated balloon catheter, PK Papyrus stent and Freesolve resorbable magnesium scaffold.
Kelly said Teleflex considers the acquired business “a meaningful contributor to our growth in the coming years.”
“We are excited to announce the acquisition of Biotronik’s Vascular Intervention business, which we anticipate will significantly enhance our global presence in the cath lab, expand our suite of innovative technologies, and improve patient care,” he said.
Teleflex posts mixed fourth-quarter results
Teleflex’s fourth-quarter earnings fell shy of revenue expectations but narrowly topped adjusted EPS projections.
The company reported losses of $136.66 million for the quarter ended Dec. 31, 2024. That equals $2.95 per share on sales of $795.4 million.
Teleflex recorded a massive bottom-line slide into the red on a sales increase of 2.8%.
Adjusted to exclude one-time items, earnings per share came in at $3.89. That landed 1¢ ahead of expectations on Wall Street. Sales failed to meet expectations, though, as analysts forecast $813.2 million in revenue.
“In the fourth quarter, we delivered strong double-digit adjusted earnings per share growth” said Kelly. “The benefits of our diversified portfolio were evident as strong performances from Interventional and Surgical helped offset softness in Interventional Urology revenues.”
Teleflex’s 2025 sales guidance ranges between a decline of 0.4% and a rise of 0.7%. It expects adjusted EPS to land between $13.95 and $14.35.
The analysts’ view on the developments at Teleflex
Truist analysts Richard Newitter, Ravi Misra, Felipe Lamar and Benjamin Goldstein maintain a “Hold” rating for Teleflex.
They wrote that all the shifts happening at the company “represent ‘change agents’ which will likely be welcomed on some level.” The analysts say Teleflex’s Urology and OEM segments recently hampered growth outlooks, so this “might have been the only option at management’s disposal.”
According to the analysts, they think management may see it as an opportunity to unlock a higher value for other growth drivers. They also note an anticipation of weak revenue performance and guidance in the recent quarterly results.
“The quarterly revenue shortfall had been pre-traded on some level,” the analysts said. “However, the miss was bigger than what we would have thought.”
CFO plans to retire
In addition to its separation news, the Biotronik buy and its quarterly earnings, Teleflex announced the departure of a longtime executive.
EVP and CFO Thomas E. Powell elected to retire effective April 1, 2025. The company tapped John R. Deren, who currently serves as VP and chief accounting officer, to succeed Powell. Following his retirement, Powell plans to serve as a consultant to Teleflex through March 31, 2026.
“Tom has announced his desire to retire from Teleflex after more than 13 years with the company,” said Kelly. “Over the years, Tom has been a trusted partner in our efforts to build a durable growth company. He has been instrumental in driving adjusted operating margin expansion, which increased 800 bps from 2012-2024. As the company has grown, Tom has built a highly capable global finance organization, which keeps us well-positioned for the future.
Deren has been at Teleflex since 2013, delivering executive oversight of various functions within finance.
