Right. Good afternoon, everyone. I think this is the last—this session sits between now and cocktail hour. Hopefully this is very engaging for folks to keep everyone attentive. I'll just remind everyone that these presentations are not open to the press. With that, I'll welcome a management team from Solventum. Very happy to have Wade McMillan, Chief Financial Officer, and Kareem Mansour, President of the Dental Solutions business. I think this is one of the first times you've been out at an investor conference, so a great opportunity to dive into one of the more significant businesses here at the company. Looking forward to that and appreciate your making the time. This presentation is being webcast. Happy to take questions from the audience.
The extent to which there are any, just raise your hand and either we'll get a mic over to you or I'm happy to repeat questions so those participating virtually can hear as well. Maybe we just kind of start at a higher level. You had an analyst meeting in March, had about a few months since then you've had an earnings call. Maybe just kind of give us your reflections on what are some of the messages that you think are resonating in your investor conversations and what are some of the things that people, maybe present company included, might be missing from your perspective.
Yeah, sure. Great place to start, David. Good to see everybody here and thanks for those joining online. I think the investor day went a long way for us. We've done a lot of work over the last year in hiring the leadership team. At our first investor day, many were either new, including myself and Bryan, new to the company or have been hired since the investor day. We've been doing a lot of work on our strategy and it was great to have our second investor day here recently to articulate that strategy. I think it's becoming clearer and clearer to investors what the value creation story is and the investor day went a long way for that. It's really prioritizing growth for us, which is a big change in the metrics.
We have articulated our growth driver strategy where 80% of our growth is going to come behind five growth drivers. Hopefully we will get a chance to talk about some of those today. We have Kareem here as well. We are going to pair that with an exciting operating margin expansion story, which we think will be something that people are interested in as we look for efficiencies across the business. We think we have a lot of levers to do that as well. We are focused on free cash flow and improvements there as well. We have a lot of opportunity. Coming out of a separation, we had a great foundation, we have great brands, have a great business, but we had a lot of work to do and we have a three-phase transformation, which we could probably talk about today as well.
We've made great progress on the first phase, which is really resetting the mission, the talent, the structure for the company, and then getting into the second phase now around commercial productivity and innovation. I'm sure we'll probably get into that a little bit today as well. With the P&F divestiture that we announced, we're pretty excited about being able to deliver our balance sheet faster than we had originally expected and us to go on offense for M&A, which may be something else we might want to talk about today. We certainly have a lot going on.
Yeah, so a lot to dive into here. I wanted to—I think as we reflect on your period of time as a public company from even when we started with the analyst meeting in March of last year to 2024, to where we are today, there's been sort of an evolution in ebb and flow about how you and Bryan have sort of talked about the business. We started with this sort of really dire, sky is falling, we've got this spin, lots of complexity, things go a lot better in 2024, come into this year, start of the year similar sort of like cautious tone, get to the analyst meeting positive, Q1 good quarter, but it's transient.
How do you think about—are you focused on just trying to keep expectations in check and execute a beat and raise, or is your impression of the business really evolving at a pretty rapid pace?
Yeah, there's a lot there. If I think about the first year, maybe I'll start there, 2024, when we started in our first investor day, we guided zero to minus two, and that certainly contemplated the newness of the business. I don't think I'd articulate a sky is falling because the business had been declining volumes for a couple of years before that. We really guided consistent with the volume that we were seeing, but we were happy to then eventually report a 1.2% growth rate. I guess we beat our original guide by 1%, which I think is pretty reasonable given that our original guide was set so early in the company's separation and spin.
Even having said that, shortly after we got into the year when we realized the SKU rationalization program really would not have an impact until this year, until 2025, that was one of the reasons along with some of the strong business performance or stronger business performance, we raised our guide to the high end of 1% midway through the year, which would be by 20 basis points. 2024, somewhere between 20 basis points and 1%, I think is pretty tight to our original guide range and obviously good to be on the beat side of that. Here in 2025, we felt we were leaning into the guidance, frankly. As I mentioned, we grew 1.2% in 2024. Some of that was still benefiting in the first half of last year from some price carryover and benefit.
When we set at one to two, if you take X SKU, it is one and a half to two and a half. At the high end, it was more than double the growth rate we saw last year, and we did have a very strong first quarter this year. We wanted to make sure people understood some of the unique volume benefits tied to some of the SKU rationalization and the ERPs and DC moves that we are making. There was no doubt we benefited in the first quarter from volume, but even with that normalized, the 2.5% growth rate was even better than we expected. The good news, the read-through there is the stronger pickup of the commercial execution. That is all volume-driven improvements and turnaround. We are seeing some strong contract wins out of our new team already.
We've hired some really experienced people who are versed in how to manage, especially in the U.S., turnaround in the business. We were very happy to see it, and we raised 50 basis points. At this point, we're 50 basis points up in 2025. I'd articulate it as a reasonable guide that we beat by just over 1% last year, and so far this year, we're 50 basis points ahead. I don't know what your other companies do, but I think that's pretty tight.
Okay. I want to come back to some of the quarterly phasing in a second, but one of the areas that we've also talked about is just the WAMGR that you had put out at the time of the analyst meeting, the 4%-5%. Maybe just remind people about how you think the difference between current market growth and WAMGR and what the respective time horizons are that you're contemplating in that presentation.
Yeah, it's a great question, David, because that's the key to the story here really is when we, I could say can we, but when we get our internal growth rates up to our WAMGR, and that's our goal is to get our growth rate up to our market growth rates, which we call 4%-5%. That's right in line with MedSurg, which is a 4%-5% market, pretty tried and true market out there in diversified med tech. We've got good momentum and we've got a lot of opportunity to improve our growth rate to hit that, particularly around our growth drivers and negative pressure wound therapy, IV site management, and sterilization assurance. We can talk about those. We're going to get into those, but we've got three really strong growth drivers that are going to drive most of the growth in MedSurg.
I'll just touch on HIS quickly and then hand it to Kareem, who's with us here on the dental side. For HIS, we think this is a great software business with a really strong moat in revenue cycle management. We do have one challenged area in clinician productivity solutions that's been declining double digits, and we think it will continue to do that. The good news is becoming a smaller and smaller piece of our business as we grow revenue cycle management. We are actually the closest to our market growth rates already in HIS in that revenue cycle management. If you take CPS out, it's already close to market growth rates.
One of the reasons we have Kareem here today, I think, is helping investors understand why we think we have the ability for our dental business to grow mid-single digits and why we think the dental market will get back to a 3%-5% market growth rate. But Kareem is probably good to you.
I can speak about that for sure. Again, my name is Kareem Mansour, leading dental solution, and happy to be here. Thank you for the invitation. Dental has obviously been a challenging market over the last few quarters. The reason for that level of low growth in the market is, as you see, economic pressure. It does impact consumer confidence. It is a reality in the dental market. An important caveat to share with everybody is that it does impact furthermore elective dentistry. Think about aesthetics, that it does impact essential care, essential dentistry. That is something to keep in mind. I would say also that as it puts pressure on dental clinic revenue, also ability and willingness for dentists and orthodontists to invest in capital, in equipment, is also under pressure. That is hard to say when the market will recover.
That being said, there are trends and dynamics in this market that are no different from any med tech industry. If you think about the aging population, as people get older, I mean, dental services will be a key requirement and they will repeat over time. Another reason is that the rising demand for dental services is a reality why all of us, as much as healthcare authorities and government around the world, do feel the need to better take care of dentistry as it does impact overall health. We see even incentives around the world starting popping up, more coverage towards dental care. Last but not least, we see definitely significant technology advancement in this market. Those dentists and orthodontists are looking for those efficient solutions.
All in all, even if it's hard to say by when the market will recover, the 3%-5% over time will be there and we are confident that it's going to rebound.
I think it is probably worth going into dental in a little bit more detail because we have you here and also, I think as you look at market growth today versus that 4%-5%, probably one of the biggest variances is dental and what that market today probably is closer to flattish. Then moving that up to the 3%-5% represents an important factor.
I think it is important there to also speak a little bit about who we are. I talked about the difference between essential dentistry and elective dentistry. Those are important factors. A significant portion of what we do is towards tooth restoration, much more biased to essential care. As we keep and we made co-restorative the growth driver number one for dental. We have some leadership position, but there is much more that we can do. As we think about this one, this is our level of confidence in being in the lower range of the 3%-5%. For sure, we are extremely confident about getting to the 3%. As the market rebounds, we will get the full leverage of that growth.
Okay. As you think, I think your business is roughly 80%,20% essential dentistry and then 20%.
One way to say it is as we shared during investor day, if you were to look at the pie chart.
Yeah, on that side.
A significant portion of what we do is tooth restoration, co-restorative. You're right.
Okay.
More biased to essential care.
Yeah. Okay. I want to get into the five key growth drivers, but maybe we can sort of cover off just some of the dynamics that I think are specific to 2025. You started the year at the little over 4% organic growth rate. You talked about, I think, relatively similar expectations for Q2 and then a deceleration in the back half of the year. If I remember correctly, one of the factors influencing the better performance in Q1 was higher inventory in the channels in advance of an ERP change, which I think is the second time you've done this, right? You did that right before. You did the, I think, the third quarter of 2023. There was a dynamic there as well before you did the cutover. Maybe just update us.
First off, let's understand why if that was just channel fill in Q1, you wouldn't see the deceleration in Q2.
Yeah. I'm glad you brought that one up as well, David. We've got a few questions throughout the day on ERP as well. Maybe just a quick update on ERP and then can talk about some of the dynamics in the quarter. We've given a rule of thumb when doing an ERP implementation that there's a checkpoint at three days, three weeks, and three months. We gave the three-day checkup at the last conference we were at a few weeks ago, which really a week and a half, that things were going well, not perfect, but well, and we're making good progress there. The good news is we have the same update here. The ERP implementation and cutover continues to go well. Our DC cutovers continue to be planned and continue to be on track. All on track, all good. Of course, not perfect.
I want to say thank you to our teams out there, our hypercare teams who are working through the challenges, sometimes working with our customers through the night and days and making sure that wherever we do see some challenges, they're helping work through it. At this point, we do not see any significant challenges to the ERP impacting our quarter. That is great news, getting through three days and three weeks, and then we will continue to progress through three months where we start to get a real sense for where things settle in. Could not be happier with the performance on ERP right now. With that, what we talked about in the first quarter was what we knew could happen, but ended up being even a little larger than we expected, was we saw some volume increases in Q1 that were really timing related.
Some of the bigger impacts were related to the ERP and DC cutover, where we had customers buying volume ahead. We saw this mostly in the categories where we sell through distribution, where the distributor stocked up on more of the higher flow, higher in demand disposable products, a lot in our IPSS business. They did that. We also saw some customers buying ahead of when we've talked to them about SKU reductions or SKU rationalization. Where we've talked about eliminating SKUs down the road, they went ahead and started stocking up. We've talked about the timing of that.
We think we'll give, actually just to put numbers to it, as you mentioned, we grew 4.3% in the quarter, but we normalized for those volume trends, and we think the normalized growth rate was closer to 2.5% in Q1, which is still a great growth rate, still more than double what we did in 2024, and an improvement importantly across all four segments.
All volume driven, unlike previous years.
Almost all volume driven. Yeah, very small pricing in the quarter. You could say almost all volume driven across four segments, which for us is a really great sign that all four segments continuing to improve even on a normalized basis. We said, when will the timing start to come back? We said it is sometime between Q2 and Q4. We think it is this year with the majority or mostly in Q3. Of course, we do not know exactly when that is going to happen. The reason we expect that is talking to our customers and distributors and expectation for them to bleed those inventories back down. That is really because we are going through the ERP implementation here in Q2, and we get to the other side of it, it would make sense to start bleeding some of those inventories down.
Right now, on the ERP cutover, people can still buy through the old, you can still transact on the old ERP system?
No, we're cutting over in Europe, where this is where we're cutting over the regional ERPs and through distribution centers. We're progressing through the ERP implementation now, and we're flowing orders through the new ERP system.
Okay. So where would the outside inventory buys come from this quarter?
For the ERPs and distribution centers be in Europe and for the SKU rationalization in the U.S..
If you've cut over.
Some of the outside the U.S. regions.
I get the Q1 piece like pre the cutover, but once you've cut over, why would you see continued pre-buying?
Oh, I don't think we will. Meaning we'll give back the inventory in Q3, meaning customers will order less.
In Q3, but in Q2.
Just depends when they slow down the orders and burn down the inventory that they have.
Okay. You have not seen a slowdown in orders.
No. We're just cutting over the ERPs now, so I wouldn't expect it.
You wouldn't expect it. Customers were able to order under the old ERP in April, for example.
Yeah, through April, exactly. As we cut over in May, now they're ordering through the new system.
Okay. The question is, the underlying growth rate in some ways will sort of surface in the back half of the year. You're disclosing it, but yes.
Yeah. Our anticipation is that that'll happen now. Could some customer ERP goes really well here in May and June and they slow down their orders at the end of June, that's possible, but we're not expecting that at this point.
Okay. Are customers carrying like really disproportionate levels of inventory, or is it possible they just keep buying on this run rate?
Yeah. In some cases, it's much easier to read because they're telling us how much they're buying, and we can see it in the distributor order patterns. Some of it is more quantitative where we're assessing it across, we can't talk to everybody, so we're assessing it across multiple distributors. It is somewhat of an analysis versus specific.
Okay. I want to go one sort of other kind of very short-term question and then go back to the growth drivers, tariffs.
Yeah.
I think within very short order of your first quarter results, there was a significant update on tariffs, especially as it relates to China. I know you provided some.
Some perspective at the last conference where you gave some incremental updates. Maybe here we are, it's almost like there are no tariffs relative to what we thought six weeks ago. What framework should people use to recalibrate their expectations around tariffs now?
I wish there was a framework for calculating tariffs at this point. It's certainly a fluid situation, as you mentioned, changes almost daily and weekly here. The approach we're taking is we're going to update on a quarterly basis. Just given the ups and downs and the fluidity of it, we're not going to update intra-quarter other than, as you said, it was almost the ink was almost just dry on Q1. At the time, China was with the US 125% and 145%. Of course, our assumptions for Europe were at the lower end, 10%. Since then, there's at least been a 90-day pause on the China side of things with significantly lower percentages, but the European percentages are higher. When you put that together, what we said at the last conference is there's potential for earnings per share upside for us.
To keep in mind, it's not a one-for-one drop-through on the $80 million-$100 million that we put out there because some of the mitigation strategies go away if we don't come through the tariffs. We do feel like we've had a real strong start to the year and good business performance that we think could drive better performance for us if it weren't for tariffs. We're going to continue to monitor it. We'll update quantitatively once a quarter to try to just manage through the ever-changing tariff landscape here.
Okay. Great.
Good news is I would just say it does look better than it did in Q1.
Okay. Excellent. Let's go back to the five growth drivers. I want to make sure we leave a little bit of time for P&L and M&A. Maybe just sort of tick through them and give us kind of the latest updates.
Yeah. Sounds good. Why do not I hit MedSurg and HIS quickly, and we have got Kareem here can talk about it for us. As you said, five growth drivers, and it is more than just picking growth drivers to grow the business. This is part of our overarching strategy to really optimize where we are going to put resources in our capital resource planning and where we want to grow and invest in the business. The idea was to come to settle on what are the growth drivers, and again, it will get over 80% of the growth behind this. It is not that we cannot change growth drivers over time. In the past, we have. We have added growth drivers. We have taken some out. These are the areas that we want to grow the business.
If you want to understand and if you want to try to decide if you think we're going to get the 4.5%, 4%, 5% growth rate or better over time, it's in these five areas. In MedSurg, I mentioned negative pressure wound therapy, which is a business that we are the rightful owners of. We have the majority of the share in traditional and then the faster growing double-digit growing part of the market, which is the single-use or disposable. We're the largest. We have the most revenue in that area as well. We're growing double digits there too. We also have a competitor in that space. The majority of their business is on the disposable single-use side of it. We think this is a great market, even the traditional side. Single-use disposable, it's growing great.
is a great lower acuity setting opportunity for that market. Traditional negative pressure wound therapy, we also think, is a great opportunity. Because we are the majority of the market, it is really on us to develop that market. It is a significantly under-penetrated market. It is unfortunate how many people have problems with wounds today and hard to treat wounds. It is really because the market has not evolved with our technology. We think that is part of the just lack of investment in developing that market. We are going to double down here behind our growth drivers. We are going to shift a lot of our resources into all five of these, but in particular, negative pressure wound therapy. We think with all the clinical data out there that we will be able to develop this market and get it growing faster. It is not a share-take opportunity in traditional.
It's more us developing and getting the penetration and getting more of these hard-to-heal wounds treated with our technology. If we move then to IPSS, we've got two growth drivers there, one around sterilization assurance. This is a unique area within MedTech focused on the sterilization department. We've actually had two recent new product launches. Call them singles, but it's nice to see innovation coming to this area. We think, again, we're a natural owner in this space, and there's so much opportunity. We've been talking to key opinion leaders in this area. When you think about hospital-acquired infections and where they originate, a lot of it is in the sterility of the products. We are the majority leader and a natural owner to win in that space. We're pretty excited about the growth driver there. Then IV therapy as well.
We've got an opportunity with the products that we have with Tegaderm, with the brand name and our new product CHG, which is a price uplift opportunity, a better performance of the product. We've got some innovation behind that one. We're pretty excited about what we have in MedSurg. For HIS, we've decided to double down again on revenue cycle management, the area where we have significant moat, significant capability. There, it's really autonomous coding. It's an opportunity to leverage some of the newer technologies. That team has been building talent and building partnerships with AI, machine learning companies to try to augment what we do today and have such a significant moat in. We're pretty excited about what we can do with that growth driver as well. Kareem, I'll turn it to you for a second.
In dental, we've made co-restorative our growth drivers, again, back to the domain knowledge and science we have in tooth restoration. Not only because it's a more resilient portion of the markets, but there is significant opportunity ahead of us. As we start from a position of strength with significant brand equity, we have the right commercial reach. I mean, more than 60 countries, we have presence in more than 60 countries. We've started the journey on beefing up our commercial engine, bringing more efficiency in that into the way we commercialize our product. What needed to happen was bringing new product to market. We have what it takes to bring new product to market. We just needed new product to bring to market. As I said during Investor Day, unfortunately, in 2022 and 2023, we had no new product to bring to market.
Believe it or not, despite the level of investment and the science we had, we are not efficient at bringing new product to market. In 2024, at the end of 2024, as I said during Investor Day, again, we brought four new products to markets, and we have now a very significant pipeline that we feel extremely strong that we're going to win in this place. One last update on what I shared during Investor Day. We spoke about Clinpro Clear, a new varnish fluoride treatment. Happy to report that nine months after the launch, we became number one market share in the U.S.. Kind of a proof point of if we are on point with the right level of innovation, we can win because we have access and we have credibility in the eyes of dentists and orthodontists.
Excellent. It's a good opportunity with the business Senior President here to ask this question. Our R&D spending has been pretty flattish at $145 million a quarter. It's actually a pretty decent-sized number as a percentage of sales. I already get him without you. What would you say about the level of R&D investment and even upwards?
You know what? The way I would answer to this is I don't think we can complain about the level of R&D investment we have in dental solution. It's the use of it. Now that we became clear about what is our focus portfolio strategy and that we also brought rigor and discipline into the R&D processes, there was some kind of a lot of waste despite the talent we had. We needed to challenge that talent to the right project. We stopped some key projects. We maintained some, and we are bringing additional new projects. Making sure that this efficiency in the R&D is back and PVI will be the way to measure that in the future. It is, as you can imagine, with no new product launch, it's very low as we speak. This is the focus.
It's more channeling the organization and our investment towards the growth drivers and making sure we take good decisions there.
Maybe on the SG&A side, we've seen pretty progressive increases in SG&A, which would be fully expected as you transition to being an independent public company. Are all of those investments behind you in terms of stand-up costs? Are we at a point now where we can--when can you start to see kind of normal SG&A leverage?
Yeah, that's right, David. We think we've made the critical investments. As you mentioned, we've made investments as part of standing up as a public company. Clearly, you have to have a board and CEO and leadership team and all those types of investments. Beyond that, we made investments in cybersecurity and quality and compliance and control areas that we just felt were necessary as a business. We have annualized those. Those are now in our P&L. Obviously, a lot of work going on in the TSA side of things as well. We've had to ramp up a lot of resources to manage through that. Having said that, I think we're in a position now where we've leveled off with the investment side of things from a stand-up public company.
From a growth side of things, that's what we're going to be balancing over time with our margin expansion. We've got a lot of efficiency projects that we're teeing up. Some we're executing. Some we're keeping in queue just because we've got a lot going on across the business right now with the separation and the divestiture. We do think we've got good opportunities to drive leverage. Paul Harrington, our leader of supply chain, talked about the cost and COGS side of things where we think we've got significant opportunity all through the COGS lines. Our segment leaders are working on their segment mix strategies and pricing excellence strategies. Focused on your question down in SG&A, we're working on projects to think about how we can get more efficient over time.
Part of that is around the stranded cost work that we're doing as part of the P&F divestiture, which are always a challenge whenever you're divesting a business. We do think we're queuing up a good amount of levers to start to drive efficiencies here. We actually have a whole project team. We've hired a new leadership team member actually managing the transition management office for us, given that we've got so many major projects happening at the same time. We'll be queuing those up. I did just want to touch on that balance between investing for growth and operating margin expansion. The first lever of our revenue growth improvement is around commercial productivity. We're working off the investment that we have today. If we see opportunities to further invest for commercial support of our growth, we'll do that.
We're going to balance that with our operating margin expansion here over time.
As you think about just growth rates of SG&A, if you assume flat headcount, should not SG&A grow at 2%-3% a year just merit increase alone and other natural inflation?
Yeah, that might be a reasonable estimate just as you think about merit. It's a different number depending on the countries around the world, but it's a reasonable estimate. If you weren't driving efficiencies, you would expect to see something like that.
Okay. So driving efficiencies is what allows you to get SG&A leverage even with a top-line growth rate in this 2.5%-3.5%?
Top-line growth rate hopefully is the biggest driver for us. It's an opportunity for us to not just drive leverage, but also more volume. That volume helps the COGS side of things as well.
Is the right way to think about it that the Solventum Wayde restructuring that you've talked about as well as the efficiencies, that helps drive SG&A leverage sort of in this transitionary period to the top line? When you get the top line back to 4%-5% top line growth, you get more natural scale leverage. Is that the right way to think about the SG&A leverage direction?
Yeah, it certainly helps. What I would say the primary objective of Solventum Way, the origination of the project, was to think about what is the new structure that we want. We have got a new culture that we are deploying. We want to be able to move faster. We want to be able to make decisions quicker. We want to drive authority to make those decisions down further into the business and have the businesses really accountable to those decisions so we can move quicker. What we inherited was a more command and control type structure where most decisions were bubbled up to the top of the organization. We are trying to reverse that to pick up the speed and pick up the accountability in the organization. As we do that, we needed a new structure. We thought through that structure.
As a part of it became some efficiencies. We saw opportunities to drive efficiency. I guess on the surface, it looks like a restructuring for efficiency, but it was really to get the structure that we wanted. Think about it as a first wave because we're still learning and we're still going to iterate and improve our structure over time. That was one to get us both the right structure as well as efficiencies. In our first investor day, we talked about low 20s operating margins, and that's where we wanted the business to be. That was kind of the new reset bar. The restructuring also helped us stay in that low 20s range and offset some of the investments that we were making.
Based on kind of where we are with tariffs, we'll see what happens. It would seem like within the 23%-25% that you've communicated, even if tariffs were to stay where they are, there's enough levers in the business to stay in that range.
Yeah, we're not going to commit to numbers at this point. What I would say is we're very committed to the 23%-25% operating margin. Tariffs obviously can change a lot over time. We do have, we think, significant levers. I mentioned in the COGS line, the supply chain team, even though they're very busy with the separation and they're very busy with the P&F divestiture, they're already teeing up a queue of projects behind supplier management. We have way too many suppliers. It's really interesting, actually, when you get into the business that as mature as the business was, our team still feels there's a lot of opportunity to get after, especially in the supplier consolidation areas. We've significantly increased the resources behind our lean or continuous improvement areas and OpEx throughout the business. In fact, we focused in manufacturing supply chain first.
We're starting to bring those lean tools and processes to the rest of the organization. Then network optimization too. We think we've got a lot of opportunity there. This is how we move product between manufacturing plants and how we leverage our distribution center. We are building up a decent queue of levers. We will see where tariffs shake out over time. To your point, we do see a lot of opportunity to drive leverage. Again, the key for us and one of the platforms for us to push for more efficiency is we want to invest more for growth over time. Again, we want to achieve operating margin expansion as we work through our long-range plan, but we want to be able to invest more for growth as well.
Maybe last, I know we only have a little over a minute left here just to touch on M&A, but it clearly is going to be part of the story. Do we have to wait for the sequencing of P&F investor to be complete, you to complete a debt tender, then for there to be M&A? What can happen in the interim here?
Yeah, that's the plan. However, if we see something small that we want to execute on and the teams are ramping up, Kareem could talk about the corporate-led strategy team that's really implementing processes at each of our segments to build a funnel of opportunities for us. We do think this is a really exciting lever for us. The playbook that a lot of us on the leadership team have deployed before and a lot of others in med tech deploy, I think what's uniquely exciting about our business is there just has not been a lot of acquisitions in this business over the years. There are a lot of tuck-in opportunities across our product categories that we could benefit from the faster growing parts of these markets if those right acquisition opportunities were out there. We're pretty excited about that.
It could start as early as end of 2025. We're really thinking about it starting in earnest in 2026, which would be on the other side of the P&F closure, which we are expecting by the end of this year.
Excellent. I think with that, we are just about at time. Kareem and Wayde, thank you very much for your.
Thank you very much.
Patience. I look forward to getting the next update, I guess, in early August.
You bet. Thank you for having us.
Thank you, Bryan.
Thanks everybody.