Teleflex to Buy Palette Life Sciences for $600M

Teleflex began a deal to acquire interventional urology company Palette Life Sciences, for an upfront cash payment of $600 million at the transaction’s close. Teleflex expects the acquisition to be completed in Q4 2023.
 
The grab will boost Teleflex’s interventional urology portfolio—which includes the UroLift system—with Non-Animal Stabilized Hyaluronic Acid (NASHA) spacer and tissue bulking products for urology, urogynecology disorders, colorectal conditions, and radiation oncology procedures.
 
Palette’s key product, the Barrigel NASHA spacer, was designed to reduce radiation delivered to the rectum during prostate cancer radiation therapy. The company said using it may increase tumor control and quality of life. The company also said Barrigel is easily sculpted, highly visible on transrectal ultrasound (TRUS), biodegradable, reversible, and features one-step assembly. Barrigel earned FDA marketing clearance in May 2022.
 
The Palette portfolio also includes Deflux and Solesta, NASHA based tissue bulking agents to treat pediatric vesicoureteral reflux and fecal incontinence, respectively. Teleflex said Palette is expected to accrue net sales of about $56 million 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,” Liam Kelly, Chairman, president, and CEO of Teleflex told the press. “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,” Kelly went on. “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.”