Arrow Shareholders to Receive $45.50 Per Share in Cash
-- Redefines Teleflex portfolio with creation of $1.4 Billion
Medical Segment
-- Establishes Teleflex Medical as a leading global supplier of
disposable medical products used in critical care, specialty
medical, and surgical applications
-- Expands critical care product lines and complements existing
respiratory, anesthesia, urology and surgery product lines
-- Teleflex to evaluate strategic alternatives for businesses in
its Commercial Segment
LIMERICK & READING, Pa.--(BUSINESS WIRE)--July 23, 2007--Teleflex
Incorporated, (NYSE: TFX) a diversified company with an expanding
medical technology business and Arrow International, Inc. (NASDAQ:
ARRO), a leading global provider of catheter-based access and
therapeutic products for critical and cardiac care, announced today
that they have entered into a definitive agreement pursuant to which
Teleflex will acquire Arrow in an all cash transaction valued at
approximately $2 billion.
The merger agreement, which was unanimously approved by both
companies' Boards of Directors, provides for a cash payment of $45.50
per share for each outstanding share of Arrow stock, representing a
premium of 20 percent over Arrow's closing share price on July 20,
2007.
"With the execution of this merger agreement, Teleflex is
redefining its portfolio and its Medical Segment by creating a $1.4
billion medical technology business that will be the largest source of
the company's revenues and profitability," said Jeffrey P. Black,
Chairman of the Board and Chief Executive Officer of Teleflex. "With
the addition of Arrow, we expect that by fiscal 2008 the Medical
Segment should achieve annual revenues of approximately $1.5 billion
and generate operating margins in the 20 percent range. We expect the
transaction to be meaningfully accretive to Teleflex's earnings by
2009."
"We see significant opportunity to continue to increase overall
operating margins, reduce cyclicality and position Teleflex for future
growth. While we remain committed to diversification, we are
continuing to redefine our portfolio to focus on those businesses that
best provide future value for our customers and shareholders. To
assist us with this effort, we have engaged Goldman, Sachs & Co. to
evaluate strategic alternatives for businesses in our Commercial
Segment."
R. James Macaleer, non-executive Chairman of the Arrow Board of
Directors, said, "This transaction and its value to Arrow shareholders
reflect the great confidence Teleflex has in Arrow's products,
businesses, and people, and the excellent long-term potential of the
combined company. We believe Teleflex is an excellent fit for Arrow
and will enhance the company's ability to further support health
provider customers around the world."
Commenting on the acquisition, Black added, "The merger of
Teleflex and Arrow will establish Teleflex Medical as a leading global
medical technology business with a specialization in disposable
products for critical care, specialty medicine and surgical
applications focused on patient safety, infection control and less
invasive access. Arrow will add an established position in
catheter-based products for critical and cardiac care with many of the
most well-respected brands in the industry, and a history of growth
through innovation and global sales channels that complement the
Teleflex Medical portfolio of disposable medical devices for
respiratory care, anesthesia, urology and surgery."
At the completion of the acquisition, Ernest Waaser, President of
Teleflex Medical will become President of the combined medical
business. Waaser added, "Combining the talented management teams,
distribution networks, strong brands and considerable resources of
Teleflex and Arrow will enable us to build and grow our medical
business while achieving significant operational efficiencies. Our
companies share similar manufacturing technologies and processes and a
complementary global footprint. Both organizations focus on critical
care applications but there is little overlap in products, affording
an opportunity to leverage both customer bases and position us for
future growth."
Strategic Fit/Complementary Product Lines
Combining Teleflex and Arrow will enable Teleflex to:
-- Create a medical technology company with a leading global
position as a provider of disposable medical products used in critical
care and surgical applications.
-- Accelerate global expansion and new channels for each company's
well-known brands, in particular enhancing opportunities for growth in
Asia and Eastern Europe utilizing Arrow's established sales network.
-- Provide customers with a broader range of medical disposables.
Medical disposables and single-use devices will be a source of
recurring sales representing in excess of 80 percent of total Teleflex
Medical revenue.
-- Focus investment in innovative technologies that provide less
invasive access during diagnostic and therapeutic procedures to reduce
infections and improve patient safety.
-- Significantly enhance the company's ability to improve overall
operating margins, reduce cyclicality and expand its medical portfolio
through expanded offerings to customers, new product development and
benefits from economies of scale.
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. Revenue synergies are expected to result from expanding
channels, expediting growth in Asian and Eastern European markets,
accelerating new product introductions, and cross-selling
opportunities.
Teleflex 2007 Earnings Guidance
Teleflex confirms its guidance of diluted earnings per share from
continuing operations before restructuring charges and losses for the
full year 2007 in the range of $4.05 to $4.25 per diluted share for
the current operations of its business. However, the acquisition of
Arrow will be dilutive to the final 2007 financial results. Additional
details on the expected dilution will be provided after final closing
occurs.
Merger Agreement
The transaction is subject to certain closing conditions,
including the approval of Arrow shareholders, regulatory approvals and
other customary closing conditions. It is anticipated that the
transaction will close by the fourth calendar quarter of 2007. Arrow
expects to consider and vote on the proposed merger agreement at its
Annual Meeting of Shareholders. There are no financing conditions in
the merger agreement and Teleflex has already secured the financing
commitment required to consummate the transaction.
Banc of America Securities LLC is acting as financial advisor and
Simpson, Thacher & Bartlett, LLP is acting as legal counsel to
Teleflex in the transaction, and Bank of America, N.A. and its
affiliates and J.P. Morgan Securities, Inc. have provided financing
commitments. Lazard is providing financial advisory services and
Dechert LLP is acting as legal counsel to Arrow.
Transaction Conference Call
Teleflex will discuss the transaction on a conference call to be
held July 23, 2007 at 9:00 a.m. (ET). Interested investors can join
the call by dialing 866-713-8307 (US/Canada) or 617-597-5307
(International) and enter Passcode # 16802683. The call will also be
available live and archived on Teleflex's website at www.teleflex.com
and accompanying slides will be posted prior to the call. An audio
replay will be available from July 23, 2007 until July 28, 2007 by
calling 888-286-8010 (US/Canada) or 617-801-6888 (International) and
enter Passcode # 19982990.
As previously announced, Teleflex will hold a conference call with
investors to discuss financial results for second quarter 2007 on
Tuesday, July 31, 2007 at 10:00 a.m. EDT.
About Arrow:
Arrow develops, manufactures and markets a broad range of
clinically advanced, disposable catheters and related products for
critical and cardiac care. The company's products are used primarily
by anesthesiologists, critical care specialists, surgeons, emergency
and trauma physicians, cardiologists, interventional radiologists and
other healthcare providers. Arrow's news releases and other company
information can be found on the World Wide Web at
http://www.arrowintl.com. Arrow's common stock trades on the NASDAQ
Global Select Market(TM) under the symbol ARRO.
About Teleflex:
Teleflex is a diversified company with 2006 annual revenues over
$2.5 billion. The company designs, manufactures and distributes
quality-engineered products and services for the commercial, medical
and aerospace markets worldwide. Teleflex employs more than 19,000
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 operating profit and operating margins, pro forma revenues of the
combined companies, expected synergies from revenues and cost actions,
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, including the anticipated
timing for closing of the transaction. Actual results could differ
materially from those in these forward-looking statements due to,
among other things, unanticipated expenditures in connection with
integration programs; costs and length of time required to comply with
legal requirements and regulatory approvals applicable to the
transaction; unanticipated difficulties in connection with integration
programs; customer and shareholder reaction and other factors
described in Teleflex's and Arrow's filings with the Securities and
Exchange Commission. A further description of these risks and
uncertainties and other important factors that could cause actual
results to differ materially from Teleflex or Arrow's expectations can
be found in each company's Annual Report on Form 10-K, as amended and
in each company's other filing with the Securities and Exchange
Commission. The expectations and assumptions reflected in such forward
looking statements may prove incorrect. Neither Teleflex nor Arrow
undertakes to publicly update or revise its forward-looking statements
as a result of new information, future events, or otherwise.
Additional Information
In connection with the proposed transaction and its 2007 annual
meeting of shareholders, Arrow intends to file a proxy statement with
the Securities and Exchange Commission. Arrow shareholders are
strongly advised to read the proxy statement and the accompanying
proxy card when they become available, as they will contain important
information. Shareholders will be able to obtain this proxy statement,
any amendments, or supplements to the proxy statement and other
documents filed by Arrow with the SEC for free at the internet website
maintained by the SEC at www.SEC.gov. Shareholders will be able to
obtain free copies of the proxy statement (when available) as well as
other filed documents containing information about Teleflex and Arrow,
without charge, at the SEC's website (http://www.sec.gov). Free copies
of Teleflex's SEC filings are also available on Teleflex's website
(www.teleflex.com) and free copies of Arrow's SEC filings are also
available on Arrow's website (www.arrowintl.com) or by writing to
Arrow International, Inc., 2400 Bernville Road, Reading, Pennsylvania
19605. For a list of participants involved in the proxy solicitation
and a description of their direct or indirect interests, please see
the 14a-12 Soliciting Materials filed by the Company on May 9, 2007.
CONTACT: Investor:
For Teleflex Incorporated:
Teleflex Incorporated
Julie McDowell, 610-948-2829
Vice President, Corporate Communications
jmcdowell@teleflex.com
or
For Arrow International:
Arrow International
Frederick J. Hirt, 610-478-3117
Chief Financial Officer
fred.hirt@arrowintl.com
or
Media:
For Teleflex Incorporated:
Gregory FCA
Joseph Crivelli, 610-642-8253 ext. 123
Senior Vice President
joec@gregoryfca.com
or
For Arrow International:
Kekst and Company Incorporated
James Fingeroth or Kimberly Kriger
212-521-4800
jim-fingeroth@kekst.com
kimberly-kriger@kekst.com
SOURCE: Teleflex Incorporated