Expands Teleflex Medical Business to $1.4 billion
Establishes Teleflex Medical as a global leader in disposables for
critical care and surgical applications
LIMERICK, Pa.--(BUSINESS WIRE)--Oct. 1, 2007--Teleflex
Incorporated (NYSE:TFX) today announced that it has completed its
acquisition of Arrow International, Inc. (NASDAQ:ARRO), a leading
global provider of catheter-based access and therapeutic products for
critical and cardiac care. Under terms of the transaction, which was
announced on July 23, 2007, Arrow International shareholders will
receive a cash payment of $45.50 for each outstanding share of Arrow
common stock.
"Completing the Arrow acquisition is a significant milestone in
our strategy to position Teleflex as a diversified company defined by
its medical business," commented Jeffrey P. Black, Chairman of the
Board and Chief Executive Officer of Teleflex. "Combining these
businesses creates a $1.4 billion global medical technology business
with a leadership position in disposable products for critical care
and surgery that will represent more than 45% of Teleflex revenues and
approximately 70% of segment operating profits in 2008."
Mr. Black continued, "Our goal now is to accelerate the growth of
our medical business while capturing cost savings and other synergies
that create value for our customers and shareholders. We believe this
transformed medical technology business will achieve enhanced growth
both organically and through bolt-on acquisitions. Arrow's robust R&D
capabilities will be leveraged to accelerate the development of
products with the goal of offering healthcare providers less invasive
access, enhanced patient safety and improved infection control. We
also see significant opportunities for cost savings and operational
improvements as we combine the infrastructure and resources of both
companies."
The company expects synergies from the transaction could reach $70
to $75 million by fiscal year 2010 through, among other actions,
reducing administrative and global infrastructure expenses, increasing
operational efficiencies and creating additional revenue
opportunities. In total, approximately 80% of the synergies are
expected to come from cost savings initiatives, with the balance from
revenue growth initiatives.
In regard to the financing of this transaction, Kevin K. Gordon,
Executive Vice President and Chief Financial Officer of Teleflex,
said, "We are pleased with the structure of our permanent financing
and the success of our bank syndication which was oversubscribed. With
recent volatility in the financing markets, we considered several
options for the capital structure and were successful in securing
financing at aggregate borrowing costs that were in line with our
original expectations."
The transaction has been financed with cash, a senior secured
syndicated bank loan and issuance of private placement notes. The
syndicated bank loan agreement includes a $1.4 billion term loan and a
$400 million revolving line of credit, both of which carry initial
interest rates of LIBOR + 150 basis points. The company executed an
interest rate swap for $600 million of the term loan from floating to
a fixed rate of 6.25%. In addition, Teleflex amended its existing
private placement notes and issued $200 million in new private
placement notes with a blended interest rate of under 8% and terms
substantially similar to the syndicated bank agreement.
In commenting on the outlook, Mr. Black added, "Teleflex's current
businesses continue to perform in line with our previously-outlined
expectations for the full year. However, repatriation of overseas cash
balances in connection with the acquisition, and expected future cash
repatriation, will result in a principally non-cash charge for income
taxes during the third quarter. As previously discussed, we expect to
record additional charges in connection with the fourth quarter
closing of the transaction. We continue to expect the transaction will
be meaningfully accretive to earnings per share in 2009."
The company expects to report third quarter 2007 earnings on
October 31, 2007 and to hold a conference call with investors on
November 1, 2007.
About Teleflex Medical:
Teleflex Medical is a global leader in disposable medical products
for critical care and surgery and a business segment of Teleflex
Incorporated. The company also produces surgical instruments and
devices and cardiac devices and disposables. Teleflex Medical derives
more than 80% of its revenue from a recurring stream of disposable
medical product sales. Teleflex Medical has over 11,000 global
employees in more than 20 countries outside the United States.
About Teleflex:
Teleflex Incorporated is a diversified company with pro forma
annual revenues over $3.1 billion. The company designs, manufactures
and distributes quality-engineered products and services for the
medical, commercial, and aerospace markets worldwide. Teleflex employs
more than 23,000 people worldwide who focus on providing innovative
solutions for customers.
Caution Concerning Forward-looking Information:
This press release contains forward-looking statements, including,
but not limited to, statements relating to anticipated future revenue
and segment operating profit, pro forma revenues of the combined
companies, expected growth of our medical business, expected synergies
from revenues and cost actions, expected income tax charges, expected
accretion or dilution of earnings created by the transaction,
anticipated improvements in business and financial performance of the
companies as a result of the transaction and expectations of business
performance from current businesses. Actual results could differ
materially from those in these forward-looking statements due to,
among other things, unanticipated expenditures in connection with
integration programs; unanticipated difficulties in connection with
integration programs; customer and shareholder reaction, market
conditions and other factors described in Teleflex's and Arrow's
filings with the Securities and Exchange Commission.
CONTACT: Teleflex Incorporated
Julie McDowell
Vice President, Corporate Communications
Phone: 610-948-2836
SOURCE: Teleflex Incorporated