Teleflex Purchases Vidacare, Reports Huge Income Gains in Q3

Teleflex Inc. is buying Vidacare Corporation, a privately held maker of intraosseous (IO, inside the bone), access devices.
The transaction is valued at $262.5 million. The acquisition is subject to customary closing conditions, is expected to be wrapped up late in the fourth quarter of 2013.

San Antonio, Texas-based Vidacare products incorporate a patented power driver and needle system to access the intraosseous space for a variety of medical, diagnostic and therapeutic purposes. Their products include the EZ-IO Intraosseous Vascular Access System, the OnControl Bone Marrow System and the OnControl Bone Access System. Vidacare’s devices are used in a broad range of applications including vascular access, emergency medicine, oncology and spinal surgery.

“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 Benson Smith, Teleflex’s chairman, president and CEO. “The acquisition of Vidacare, an industry leader with a high gross margin profile, will expand our comprehensive vascular access product portfolio with a defining technology that can provide either a bridge to longer term access devices such as a central venous catheter, or a rapid, less expensive, and lower risk alternative for difficult vascular access when long-term central lines are not necessary.”

On the heels of the Vidacare announcement, Limerick, Pa.-based Teleflex also reported impressive third-quarter results—particularly the quarter’s profit picture.

The company reported net income of $46.6 million (a huge gain of 114 percent from $21.7 million), or $1.13 per share, on sales of $413.8 million (up 12.4 percent from $368 million) compared with the same period last year.

Officials said strong sales figures were a result of the company’s critical care division, which experienced gains from products acquired from Teleflex’s buyout in October 2012 of Netherlands-based LMA International for $276 million.

Results by division include:

Third-quarter revenue for the company’s Critical Care business was $289.3 million, an increase of 18.7 percent compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2013 net revenues increased 17.9 percent compared to Q3 2012. The increase in constant currency revenue was due to higher sales of anesthesia, vascular, urology and interventional access products. The growth in sales of anesthesia products was primarily due to the contribution from the LMA International business. Constant currency sales growth was partially offset by a decline in sales of respiratory products as compared to the third quarter of 2012.

The Surgical Care division’s third-quarter net revenues were $73.2 million, an increase of 5.2 percent. Excluding the impact of foreign currency fluctuations, third quarter 2013 net revenues increased 3.9 percent compared to the prior year period. The increase in constant currency revenue was due to higher sales of ligation, suture and access products, partially offset by a decline in sales of general surgical instrument products as compared to the third quarter of 2012.

Cardiac Care third-quarter 2013 net revenues were $17.6 million, a decrease of 1.6 percent compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2013 net revenues also decreased 1.6 percent. The decrease in constant currency revenue was due to a decline in sales of intra-aortic balloon pumps as compared to the third quarter of 2012.

Third-quarter results for the OEM and Development Services division were $33.7 million in net revenues, a decrease of 8.5 percent compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2013 net revenues decreased 9.4 percent compared to the prior year period. The decrease in constant currency revenue was primarily due to a decline in sales of catheter, extrusion and performance fiber products as compared to Q3 2012.