By Lisa Kerner
Charlotte, N.C., July 23 - Teleflex Inc. announced a definitive agreement to acquire Arrow International Inc. in an all-cash transaction valued at about $2 billion, or $45.50 per share.
The per-share price is a 20% premium over Arrow's closing share price on July 20.
Both companies' boards of directors have approved the transaction, which is slated to close in the fourth quarter subject to shareholder approval. Synergies from the deal could reach $70 million to $75 million by fiscal year 2010, the companies said.
Following the transaction's close, Teleflex Medical president Ernest Waaser will become president of the combined medical business.
"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," Teleflex chairman and chief executive officer Jeffrey P. Black said in a company news release.
"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% range. We expect the transaction to be meaningfully accretive to Teleflex's earnings by 2009."
"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," Waaser stated in the release. "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."
Teleflex was advised by Banc of America Securities LLC and Simpson, Thacher & Bartlett, LLP. Financing commitments were provided by Bank of America, NA and its affiliates and J.P. Morgan Securities, Inc. Arrow was advised by Lazard and Dechert LLP.
Reading, Pa.-based Arrow develops, manufactures and markets disposable catheters and related products for critical and cardiac care.
Teleflex's products are used in the commercial, medical and aerospace markets. The company is located in Limerick, Pa.
| Acquirer: | Teleflex Inc.
|
| Target: | Arrow International Inc.
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| Transaction total: | $2 billion
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| Price per share: | $45.50
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| Announcement date: | July 23
|
| Expected closing: | Fourth quarter
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| Stock price for target: | Nasdaq: ARRO: $37.79 on July 20
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