Teleflex closed the sale of its OEM business to private equity firms Montagu and Kohlberg & Company on Aug. 3. The transaction brought in $1.5 billion in cash and roughly $1.25 billion after taxes, according to the company’s announcement. The divested unit, which makes custom medical device components for other manufacturers, has since been renamed Ingenyx.
The logic behind the sale sits in Teleflex’s balance sheet more than in the OEM unit’s performance. Teleflex plans to put the after-tax proceeds toward $800 million in debt reduction and toward finishing a $1 billion share repurchase authorization, a combination the company described as returning “significant capital to shareholders through debt paydown and share repurchases.” Teleflex called the sale “a pivotal milestone” in a broader restructuring meant to sharpen its focus on its remaining, higher-margin businesses.
Ingenyx, as the standalone company is now known, makes interventional catheter components, surgical fibers, sutures and related parts used in structural heart, neurovascular, electrophysiology and urology devices. The company runs seven facilities across the United States, Ireland and Mexico, according to MPO magazine’s coverage of the rebrand. Greg Stotts, who ran the unit inside Teleflex, continues as chief executive, and Kohlberg operating partner Matt Jennings becomes executive chairman.
Montagu partner Adrien Sassi said the business “has built a reputation as a leading strategic supplier” and that the firms plan to lean on their “carve-out expertise” to support Stotts and his team “in unlocking the full potential of the company,” according to Montagu’s own release on the deal. Kohlberg senior partner Chris Anderson added that the company is “ideally suited to benefit from Kohlberg’s expertise supporting market-leading healthcare platforms.”
Centerview Partners LLC advised Teleflex on the financial side, and Simpson Thacher & Bartlett LLP handled its legal work. Kirkland & Ellis LLP and Ropes & Gray LLP represented Montagu and Kohlberg. Joele Frank served as Teleflex’s outside communications adviser on the transaction, a role that spanned the deal’s announcement earlier this year through its close in August. That span covered both the initial signing and the closing statement carried by Businesswire.
Carve-outs like this one tend to generate two rounds of communications work: one when the sale is announced and terms are still provisional, and a second when the deal actually closes and a new corporate identity, in this case Ingenyx, needs its own introduction to customers and suppliers. Joele Frank’s mandate covered the Teleflex side of both rounds, while the rebrand messaging for the newly independent company fell to Ingenyx’s own team rather than to Joele Frank.
Joele Frank advises public companies on divestitures and other corporate transactions as part of its broader practice, according to its own account of its work, and the Teleflex assignment fits that pattern: a healthcare company shedding a manufacturing unit to focus on its core business, with debt reduction as the immediate payoff. Teleflex’s own investor relations team fielded shareholder questions on the deal. Joele Frank handled press inquiries and trade-publication coverage of the closing instead.
Whether Ingenyx thrives as an independent supplier, or Teleflex’s remaining businesses grow into the capital freed up by the sale, will take longer to answer than the deal itself took to close.
