Teleflex Inc. (TFX, Financial) stock is up 10.56% in the past five-day period. The company's rally is driven by the announced acquisition of Neotract, reported on Sept. 5.
The transaction, valued as much as $1.1 billion, includes a $725 million cash payment at closing.
The company can pay as much as $375 million in milestone payments through the end of 2020. The deal will be financed through debt.
The board of directors for both companies agreed to the deal. Neotract, a private company, is the owner of the FDA-cleared UroLift System aimed at helping treat urinary tract symptoms. The company's revenue in 2016 was $51 million, up from $18 million in 2015. The company achieved year-over-year growth of 178%. Revenue for 2017 is expected to be between $115 million and $120 million.
"We are excited to join the Teleflex organization, which shares our vision for making UroLift the standard of care for BPH. Today's announcement is a recognition of our focus on patient outcomes and the hard work and dedication of the entire NeoTract team," said Dave Amerson, CEO of Neotract.
The deal is expected to expand Teleflex's organic growth by an additional 2% to 3%.
Teleflex's stock continues its rally in early morning trade on Monday, up 0.28%. The company is in the news again on Monday following an announcement that it will present at the 47th annual meeting of the International Continence Society.
The meeting will be held between Sept. 12 and Sept. 15 in Florence, Italy.
Teleflex, a leading supplier of intermittent catheters, will present a special highlight of the company's Liquick X-treme System, which the company says will help simplify catheter systems.
The system is ready to use immediately out of the package and is preactivated. Nontouch insertion is guaranteed. The company's system utilizes the SafetyCat Safety Catheter, which is used by millions of people around the world and is made in Germany.
Liquick X-treme will be available on Sept. 19 in Germany.
Teleflex's stock is up 13.27% in the trailing 30-day period, 16.12% in the trailing 90-day period and 27.36% in the trailing one-year period.
Teleflex's second-quarter earnings showed 11.6% growth in revenue on an as-reported basis and a 12.9% gain on a constant currency basis. The company's Vascular Solutions product line accounted for 9.6% constant growth revenue.
The addition of Neotract is expected to add to the company's growth following the acquisition's closing.
Disclosure: Jacob Maslow does not have any stakes in the listed equities.
