Teleflex's Latest Essential Medical Buyout to Broaden Suite
Teleflex Incorporated TFX recently announced the buyout of a privately-held medical device company — Essential Medical, Inc. Notably, Essential Medical manufactures and markets the MANTA Vascular Closure Device. However, financial details of the deal have been kept under wraps.
Teleflex expects the buyout to be modestly accretive to its constant currency revenue growth and gross margin over a multi-year period, post an expected FDA premarket approval of the device in 2019.
This acquisition will help in strengthening Teleflex’s position in the high-potential structural heart and endovascular aneurysm repair markets. Notably, Essential Medical’s portfolio will be integrated into Teleflex’s interventional cardiology business.
MANTA Device in Details
This CE-Marked device is particularly designed for closure of big bore arteriotomies following procedures using devices or sheaths ranging in size from 10F to 18F (with maximum outer diameters of up to 25F).
Per Teleflex, over 8,100 procedures have been completed using the MANTA Vascular Closure Device across a number of countries in the European Union.
Market Potential
Per a report by Allied Market Research, the global structural heart devices market is expected to see a CAGR of 10.5% between 2016 and 2022. Going by another report by Allied Market Research, the global endovascular aneurysm repair market is likely to witness a CAGR of 6.2% from 2017 to 2023.
Interventional North America Arm at a Glance
This segment consists of the North American component of the company’s acquired Vascular Solutions business as well as interventional access and cardiac care businesses.
Notably, the acquisition of Vascular Solutions (made in February 2017) has started to meaningfully accelerate growth of Teleflex’ vascular and interventional access product portfolios by facilitating expansion into the coronary and peripheral vascular market and generating increased cross-portfolio selling opportunities.
In the last-reported quarter, revenues from Interventional North America business were impressive on strength in Vascular Solutions product as well as growth in the OnControl and AC3 product line.
Share Price Movement
Over the past year, Teleflex has been underperforming its industry. The stock has gained 4.1% compared with the industry’s 24.1%. We believe this latest development will help the stock rebound.
Zacks Rank & Key Picks
Teleflex currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Intuitive Surgical ISRG, Amedisys, Inc. AMED and Masimo Corporation MASI.
Intuitive Surgical’s long-term expected earnings growth rate is 14.7%. The stock currently carries a Zacks Rank of 2 (Buy).
Amedisys’ long-term expected earnings growth rate is 19.4%. The stock holds a Zacks Rank #2 at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Masimo’s long-term expected earnings growth rate is 14.8%. The stock has a Zacks Rank #2 at present.
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Teleflex Incorporated (TFX) : Free Stock Analysis Report
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