Teleflex Inc has completed the divestiture of a significant portion of its respiratory business to Medline Industries Inc for $286 million in cash, reduced by $12 million in working capital not transferring to Medline.
The divested Teleflex respiratory product lines include Hudson RCI products for oxygen and aerosol therapy, active humidification, noninvasive ventilation, and incentive spirometers, all of which generated $139 million in revenue in 2020, according to the company. In 2021, the divested respiratory product lines were expected to contribute net revenue approximately flat with the $139 million in 2020.
Based on the date of closing, the company estimates a revenue headwind of $28-$32 million and adjusted earnings per share dilution of $0.10-$0.15 in 2021 or approximately 1% of 2021 adjusted earnings per share, net of a manufacturing services agreement that Teleflex has entered into with Medline as of the initial closing of the sale transaction. Teleflex intends to use the proceeds from the divestiture to pay down debt, augmenting its financial flexibility to support its growth strategy.