Teleflex To Buy Vascular Solutions For About $1.0 Bln

(RTTNews) - Teleflex Inc. (TFX) and Vascular Solutions Inc. (VASC) announced that they have entered into a definitive agreement by which Teleflex will acquire Vascular Solutions in a transaction valued at approximately $1.0 billion.

As per the terms of the agreement, Teleflex will acquire all of the issued and outstanding shares of Vascular Solutions common stock for $56.00 per share, in cash.

Vascular Solutions noted that the purchase price represents a 16% premium over Vascular Solutions' average closing price during the 90 trading days ended December 1, 2016. In addition, the purchase price is 38.4x the midpoint of the company's preliminary 2017 EPS guidance of $1.44 to $1.48, and the transaction value, net of cash on hand, is 5.2x the midpoint of the company's preliminary 2017 revenue guidance of $183 million to $187 million.

The Boards of Directors of both Teleflex and Vascular Solutions have unanimously approved the transaction.

Teleflex said it expects the transaction will create value for its shareholders and will be accretive to adjusted earnings share in 2017, including the impact of incremental interest expense associated with financing the transaction.

Teleflex expects the acquisition to provide approximately $0.50 in adjusted earnings per share accretion in fiscal year 2018 (first full fiscal year post-close) and to be increasingly accretive thereafter. The Company anticipates generating synergies of between $40 million to $45 million by fiscal year 2019 (second full fiscal year post-close). The acquisition is expected to generate a return on invested capital that meets the Company's cost of capital in the fourth year and comfortably exceeds the Company's cost of capital in the fifth year.

This transaction is subject to the approval of Vascular Solutions' shareholders and the satisfaction of customary closing conditions and is expected to close during the first half of 2017.

Founded in 1997, Vascular Solutions is a medical device company that focuses on developing clinical solutions for minimally invasive coronary and peripheral vascular procedures.

Teleflex noted that it has obtained a commitment letter from JPMorgan Chase Bank, N.A. for a new $750 million senior unsecured bridge facility in connection with the planned acquisition. Teleflex plans to finance the acquisition at closing through a combination of availability under its revolving credit facility and a new senior secured term loan facility. Following consummation of the transaction, Teleflex may look to opportunistically issue senior unsecured notes, the proceeds of which will be used to either repay borrowings under the revolving credit or the new senior secured term loan facilities.