A publicly-traded global provider of medical technology products has agreed to purchase Wallingford bleeding control gauze manufacturer Z-Medica from its private equity owners for at least $500 million.
Pennsylvania-based Teleflex, a $15.7 billion company with approximately 14,000 employees in the U.S. and around the world, said it expects its acquisition of Z-Medica to close by year’s end.
Teleflex is paying $500 million in cash and has agreed to additional payments worth as much as $25 million contingent on commercial milestones.
The seller is Linden Capital Partners, which invested in Z-Medica in 2017.
Z-Medica, privately held since its founding in 2002, makes blood-clotting, or “hemostatic,” products under the brand names QuikClot, Combat Gauze and QuickClot Control+, which control high-volume bleeding from gunshots during surgery and in other urgent trauma scenarios. Z-Medica makes use of an active ingredient called kaolin, a type of clay that quickens the body’s clotting process.
As military sales fell in the wake of the Iraq War, Z-Medica shifted gears this past decade, pushing to get its products into hospitals, police and fire departments, schools, and other locations.
Teleflex CEO Liam Kelly said his company was drawn to Z-Medica due its leading position among its competitors, as well as its high gross profit margins and anticipated annual revenue growth in the high single-digits.
In a recent quarterly earnings call with stock analysts, Kelly also noted Z-Medica’s strong intellectual property portfolio and the clinical efficacy of its products borne out by clinical studies.
He also said there’s room to grow the company.
“It’s a very sticky product growing into a market that’s a $600 million market globally with an opportunity to expand overseas,” he said.
In a statement, Z-Medica CEO Eric Compton, who was hired in early 2018, said Teleflex “shares our vision for making our products the standard of care for the treatment of hemorrhage control.”
“Today’s announcement is a recognition of our focus on patient outcomes and the hard work and dedication of the entire Z-Medica team,” Compton said.
