Teleflex is inking a $650 million deal to acquire Palette Life Sciences, the maker of urologic spacer implants and tissue bulking products.
The agreement includes $600 million in upfront cash, plus $50 million tied to the completion of future commercial milestones. In its announcement, Teleflex said it is aiming to close the deal in the fourth quarter of this year.
The California-based Palette’s portfolio includes Barrigel, a biodegradable spacer that can be injected and then shaped to help protect a patient’s rectal tissue as they undergo radiation therapy for prostate cancer, to help spare healthy tissue from unwanted side effects.
The company also markets Deflux, a gel used to bulk up tissues around the urethra to stop urine from flowing backwards into the bladder, which can cause recurrent urinary tract infections in children. Deflux is also being developed for future use in adult stress urinary incontinence. Meanwhile, the Solesta bulking agent is aimed at treating fecal incontinence.
“The acquisition of Palette Life Sciences will allow us to incorporate this exciting technology into our Interventional Urology business unit and bring urologists, radiation oncologists, and other specialists more innovative technologies that can positively impact patient care,” Liam Kelly, Teleflex’s president and CEO, said in the companies’ announcement.
Teleflex already sells UroLift, a series of permanent metal implants designed to relieve the symptoms of benign prostatic hyperplasia—or a swollen prostate gland commonly known as BPH—by cinching up the gland’s tissues to lessen the pressure on the urethra.
With net sales of Palette’s portfolio estimated to reach $56 million in 2023, Teleflex expects the acquisition to bring “year-over-year revenue growth in the high-teens to low 20% range” in 2024, Kelly added.
Teleflex said it plans to finance the deal by borrowing under its credit facilities and through its cash-on-hand, and is scheduled to provide more details on the company’s second-quarter earnings call set for Aug. 3.