Teleflex Acquires Bariatric Surgery to Expand its Surgical Portfolio with Differentiated Stapling Technology

Teleflex Incorporated has entered into a definitive agreement to acquire Standard Bariatrics, Inc. which has commercialized an innovative powered stapling technology for bariatric surgery. Under the terms of the agreement, Teleflex will acquire Standard Bariatrics for an upfront cash payment of $170 million at closing, with additional consideration of up to $130 million payable upon the achievement of certain commercial milestones. The acquisition is subject to customary closing conditions, including receipt of certain regulatory approvals, and is expected to be completed early in the fourth quarter of 2022.

The Titan SGS® from Standard Bariatrics addresses unmet needs in sleeve gastrectomy by offering surgeons the longest continuous staple cutline of 23 centimeters^[1,2]. This first-of-its-kind stapler may help users achieve more consistent and symmetrical sleeve pouch anatomy, setting their patients up for optimized outcomes. While every patient’s anatomy is different, the Titan SGS® long staple line enables surgeons to plan and place staples in one firing, minimizing variations sometimes associated with the use of multiple overlapping short-cartridge staple firings^[1,3]. Additionally, the design may result in a more secure staple line and fewer chances of leaks, as evidenced with higher burst pressures^[4].

“Teleflex’s strategy is to invest in innovative products and technologies that can meaningfully enhance clinical efficacy, patient safety and comfort, reduce complications, and lower the overall cost of care,” said Liam Kelly, Chairman, President and Chief Executive Officer. “The acquisition of Standard Bariatrics adds an exciting and differentiated product serving the large and growing sleeve gastrectomy market, which we estimate to be approximately 120,000 procedures^[5] annually in the U.S. In addition, the deal enables Teleflex to leverage our strength in our existing bariatric surgeon call point, with a differentiated product that complements many of our key surgical products, including our ligation portfolio, MiniLap® Percutaneous Surgical System and Weck® EFx Fascial Closure Portfolio.”

Mr. Kelly added, “We are excited to enter into this transaction, which we expect to be immediately accretive to Teleflex’s revenue growth and also enhance our gross margin profile over time. We also expect that the acquisition will exceed our cost of capital by the end of the fourth year following the completion of the acquisition.”

Teleflex plans to finance the acquisition at closing through borrowings under its revolving credit facility.

1. Salyer, C. E., Thompson, J., Hoffman, A., Burstein, M. D., Enochs, P., Watkins, B. M., Kuethe, J., & Goodman, M. D. (2022). Multisite Study of Titan SGS Stapler in longitudinal gastric resection. Surgical Endoscopy. https://doi.org/10.1007/s00464-022-09051-x
2. Salyer, C., Goodman, M., Kuethe, J., Watkins, B., Enochs, P., Hoffman, A., & Thompson, J. (2021). Multisite Study of Titan SGS Stapler in Longitudinal Gastric Resection.
3. Toro, J., Lin, E., Patel, A., Davis, S., Sanni, A., Urrego, H., Sweeney, J., Srinivasan, J., Small, W., Mittal, P., Sekhar, A., & Moreno, C. (2014 Sept.). Association of Radiographic Morphology with Early Gastroesophageal Reflux Disease and Satiety Control after Sleeve Gastrectomy. Journal of the American College of Surgeons, 219(3), 430–438. https://doi.org/10.1016/j.jamcollsurg.2014.02.036
4. Salyer, C., Spuzzillo, A., Wakefield, D., Gomaa, D., Thompson, J., & Goodman, M. (2021 July). Assessment of a novel stapler performance for laparoscopic sleeve gastrectomy. Surgical Endoscopy, 35(7), 4016–4021. https://doi.org/10.1007/s00464-020-07858-0
5. American Society for Metabolic and Bariatric Surgery, Estimate of Bariatric Surgery Numbers, 2011-2020, published June 2022.