We initiated a position in Teleflex, Inc. (NYSE:TFX), a medical device company that over the past five years has been transformed, under CEO Benson Smithâ€™s leadership, from a diversified industrial company into a pure-play medical device company through a series of divestitures and acquisitions. Today, the company sells products used by hospitals and health care providers for critical care applications and surgical procedures. The companyâ€™s products include, among others, catheters that provide vascular access for delivery of intravenous medications, laryngeal masks for delivery of anesthesia, and surgical instruments used for minimally invasive surgery. The companyâ€™s products are used in procedures for treatment of acute or life-threatening illnesses and are therefore less susceptible to being cut during an economic downturn.
We think the company has a solid base business that should be able to grow in the mid-single digits on an organic basis driven by volume growth, new product introductions, and to a lesser extent pricing. In addition, we think the company has the potential to accelerate its organic growth through several interesting new product opportunities, including, among others, the Percuvance Surgical System, a surgical instrument for use in minimally invasive procedures. Percuvance requires a smaller incision site than traditional laparoscopic surgery, while maintaining the equivalent rigidity and strength of laparoscopic instruments. Percuvance has the potential to reduce patient trauma and minimize scarring. The company plans to pursue a full market release of the product in the third quarter of 2016. We think the product has widespread application and well over $100 million of revenue potential over the long term. Continue Reading Â»