Good day, ladies and gentlemen, welcome to the Teleflex Incorporated conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Jake Elguicze, Treasurer and Vice President of Investor Relations. Sir, you may begin.
Good morning, everyone, thank you for joining us on this conference call to discuss the announcement we made this morning regarding the acquisition of Vascular Solutions by Teleflex. The press release and slides to accompany this call are available on our website at www.teleflex.com. As a reminder, this call will be available on our website. A replay will be available by dialing 855-859-2056, or for international calls, 404-537-3406, passcode 31448476. Participating on today's call are Benson Smith, Chairman and Chief Executive Officer, Liam Kelly, President and Chief Operating Officer, Thomas Powell, Executive Vice President and Chief Financial Officer. Before we begin, I'd like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in our slides.
We wish to caution you that such statements are in fact forward-looking in nature and are subject to risks and uncertainties. Actual events or results may differ materially. The factors that could cause actual results or events to differ materially include, but are not limited to, factors made in our press release today, as well as our filing with the SEC, including our Form 10-K, which can be accessed on our website. With that, I'd like to now turn the call over to Benson to discuss the Vascular Solutions transaction.
Thanks, Jake, good morning, everyone. I am excited to talk to you this morning about the announcement we made regarding our agreement to combine Vascular Solutions with Teleflex. I'll start by providing an overview of the strategic rationale behind the acquisition and an overview of the transaction. I will then turn the call over to Liam and Tom. They will provide an overview of Vascular Solutions, a summary of what the transaction means from a financial perspective. Finally, I'll provide a few closing remarks before opening the call up to Q&A. To begin, we are extremely pleased to announce this definitive agreement with Vascular Solutions as it represents a significant step forward in our strategy. Vascular Solutions is a truly unique company with differentiated technologies that serve the coronary and peripheral vascular markets. This acquisition is very complementary to our existing portfolio.
The combination of Vascular Solutions and Teleflex significantly advances our offering of vascular and interventional solutions as we're adding over 90 proprietary products and services that are sold to interventional cardiologists, radiologists, electrophysiologists, and vein specialists. Combined, the new company will offer more than 150 cardiac, vascular, and interventional products globally. This acquisition also accelerates Teleflex's sales growth trajectory and provides a significant sales channel opportunity. Vascular Solutions has consistently generated greater than 10% revenue growth per year over the last decade, and this acquisition positions Teleflex to enter new, faster-growing markets. In addition, we expect to capitalize on Teleflex's significant international infrastructure to drive further penetration outside the U.S. of Vascular Solutions products. Another reason we're excited about acquiring Vascular Solutions is its robust R&D pipeline.
These products are differentiated, high growth, and high margin products that have demonstrable clinical benefits that address complex interventions, radial artery catheterizations, and embolization procedures, all areas of clinical practice that Teleflex knows a lot about. Finally, this acquisition has a compelling financial profile that substantially improves Teleflex's revenue growth, margins, earnings, and cash flow generation capabilities for years to come. We expect that the transaction will be accretive to adjusted EPS in 2017, including the impact of incremental interest expense associated with financing the transaction. Importantly, this transaction meets all of the M&A objectives we've been talking about for the last several years, which include a product portfolio that fits into our existing strategic business unit franchises and call points, thereby allowing significant synergy generation.
Products that provide a superior clinical benefit through existing alternatives and a cost benefit to hospitals, long product life cycles that benefit from patent protection, and the ability to further improve our financial profile. This acquisition also bolsters our leadership and management team with the additions of key members of the Vascular Solutions leadership team who will be instrumental in continuing to drive the business forward. We look forward to welcoming them into the Teleflex family. Turning to the details of the transaction. Teleflex will be purchasing Vascular Solutions for $56 per share or a transaction value of approximately $1 billion. This represents a revenue multiple of approximately 5.4x using the midpoint of their 2017 financial guidance that was previously provided by Vascular Solutions.
While this transaction is a bit larger in terms of purchase price than ones we've done historically, this management team has a proven track record of successfully integrating acquisitions and quickly de-levering. That is something we believe will occur with this acquisition as well. It is important to understand that the completion of this transaction will not prevent Teleflex from completing other strategic initiatives such as distributor to direct conversions or technology acquisitions, where we will continue to be able to fund through free cash flow generation. I've stated many times in the past, Teleflex intends to maintain its debt to adjusted EBITDA at approximately three times over the long term. This transaction has been unanimously approved by both Teleflex and Vascular Solutions' boards and is subject to approval by Vascular Solutions' shareholders, regulatory approval, and other customary closing conditions.
We expect this acquisition to close during the first half of 2017 and for it to be accretive in 2017 adjusted earnings per share. During 2018, or the first full fiscal year in which the acquisition would be part of Teleflex, we expect Vascular Solutions to deliver approximately $0.50 in adjusted earnings per share accretion and to be increasingly accretive thereafter. That completes my prepared remarks. I'd like to now turn the call over to Liam for him to provide you with an overview of Vascular Solutions. Liam?
Thank you, Benson. Good morning, everyone. It is a pleasure to be speaking with you today. Founded in 1997, Vascular Solutions is an innovative medical device company that focuses on developing clinical solutions for minimally invasive coronary and peripheral vascular procedures. The company's product line consists of more than 90 proprietary products and services that are sold to interventional cardiologists, interventional radiologists, electrophysiologists, and vein specialists through its direct U.S. sales force and international independent distributor network. They have approximately 570 employees, including 106 direct salespeople within the United States. Outside of the United States, they work through a network of 42 independent distribution companies that covers 57 countries. Teleflex's international footprint will help accelerate product adoption and growth overseas.
From a call point perspective, for the first nine months of 2016, approximately 74% of their sales were of products and services used in the interventional cardiology market, 13% in the phlebology market, 9% in the interventional radiology market, and 4% in the electrophysiology market. From a geographic perspective, for the first nine months of 2016, approximately 81% of their revenue was generated within the United States, while international sales accounted for approximately 19%. It is important to understand that as of the first nine months of 2016, approximately 80% of their revenue was generated by their top eight selling products. This should make the integration of our two companies easier and allow our combined sales force to drive further revenue growth in the future.
Over the past decade, Vascular Solutions' revenue growth performance has been incredibly consistent, as evidenced by over 10 consecutive years of greater than 10% revenue growth. We fully expect this revenue growth to continue in the future and, similar to Vidacare, anticipate that Vascular Solutions will add approximately 1% per year towards the Teleflex constant currency revenue growth rates for the next several years. That completes my prepared remarks. At this time, I will turn the call over to Tom for him to provide you with a financial overview of the transaction. Tom?
Thank you, Liam, and good morning, everyone. This transaction has a very compelling financial profile, and it meets multiple key criteria that we look for in an acquisition. Liam just mentioned that similar to Vidacare, this transaction substantially improves Teleflex's ability to consistently generate revenue growth in the mid-single digits. In addition, given the differentiated nature of the product lines, this transaction is expected to meaningfully accelerate our growth and operating margin profile. More specifically, we anticipate that by 2018, Vascular Solutions will add approximately 80 basis points of growth to the base Teleflex adjusted gross margin and add approximately 100 basis points of growth to the base Teleflex adjusted operating margin. We expect for continued meaningful margin expansion beyond 2018 as integration synergies become fully realized.
In short, this transaction further supports our ability to grow our top line in the 5%-6% level over the next few years while accelerating our adjusted gross and operating margins. This acquisition also puts to work existing balance sheet capacity. As of September 2016, our leverage ratio was approximately two times, as defined for our credit facility definition. Immediately following this transaction, we expect leverage to increase above our longer-term target of three times leverage. We expect that continued earnings momentum from Teleflex's base business, combined with synergies from the merger, will allow us to quickly delever. We anticipate funding this acquisition and closing through a combination of a new $750 million senior secured term loan facility, coupled with drawing down on our revolver by approximately $250 million.
Following the completion of the transaction, we may seek to opportunistically issue senior unsecured notes to more permanently finance the transaction. If we were to issue new senior unsecured notes, the proceeds received would be used to either repay borrowings under the revolver or the new term loan. From a return standpoint, we expect to generate a return on invested capital that meets the company's cost of capital in the fourth year and comfortably exceeds the company's cost of capital in the fifth year. Further, the acquisition is expected to be accretive to adjusted earnings per share in 2017, deliver approximately $0.50 of adjusted earnings in 2018, and to be increasingly accretive thereafter.
Given the highly synergistic nature of the two companies, our adjusted earnings per share expectations include an assumption that we'll be able to generate synergies of between $40 million-$45 million by 2019, or the second full year post-close. Finally, I'd like to point out that the transaction is not conditioned on financing, as we have obtained a bridge financing commitment from JP Morgan.
As I stated earlier, we intend to fund the transaction at closing through a mixture of pre-payable bank debt, and we do not anticipate drawing on the bridge. That completes my prepared remarks. I'll now turn the call back over to Benson for closing. Benson?
Thanks, Tom. In closing, we are very excited about this highly strategic and synergistic transaction. It's our belief that the combined company will offer tremendous benefits to the customers who purchase our products, as well as the patients who use them. We anticipate that Vascular Solutions will accelerate the Teleflex sales growth trajectory, provide an opportunity to leverage our direct sales channel, improve our R&D pipeline, and increase our adjusted gross and operating margins for several years to come. Finally, we believe that this transaction creates value for our shareholders, as it's expected to drive significant adjusted earnings per share in the future. That completes my prepared remarks. At this time, I'll turn the call back to the operator for Q&A. Operator?
Thank you. Ladies and gentlemen, at this time, if you have a question, please press the star and then the number one key on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Again, that is star one for questions. Our first question comes from Brooks West with Piper Jaffray. Your line is now open.
Hi. Good morning. Can you hear me?
We can. Good morning.
Yes. Good morning, Brooks.
Good morning, good to see both companies earlier this week at our conference. Congratulations on the deal. Couple questions from me. Just, Liam, I'd love to learn a little bit more where you see kind of the low-hanging fruit, especially on the revenue synergies. Is it the combination of the products and the sales forces? Is it the OUS opportunity? Where do you see kind of the immediate opportunity to hit the accelerator?
It's a combination of both, Brooks. We have approximately a similar size business globally in the interventional and cardiac area. Our interventional business is within our vascular business unit, and our cardiac business is reported in the all other category for Teleflex. Also, our significant international channel. I'll just give you a brief example. Vascular Solutions has not registered the GuideLiner or the Turnpike in China, for example. We have a significant channel opportunity within the Chinese market to accelerate growth into the future, and I think that their track record of over 10% growth for the last 10 years, we believe that combining that with our organization in the interventional cardiology and radiology suite, in particular, will help to drive growth not only in Vascular Solutions, but also in Teleflex. It'll be synergistic to Teleflex as well from a growth perspective.
Great. I guess two more questions from me. This gets you further into interventional medicine, interventional cardiology in particular, potentially hundreds of tuck-ins you could do here. Should we think about this area of cardiovascular medicine as an increased focus for you in terms of both growth and acquisitions?
I would say, Brooks, the answer to that is yes. We've had to shy away from sort of smaller single product tuck-ins that were in that space because we didn't feel we had enough of a sales presence to really capitalize on it. I think our thought is that this opens the door to a lot of those opportunities that we had to say no to in the past.
Okay. Helpful. I guess last for me, there's some big opportunities in the Vascular pipeline. The freeze-dried plasma opportunity in particular was something that was held out to be transformative for that company. I'd love to get your thoughts just on that opportunity and how that might fit into your product mix. Thanks.
We reviewed that as part of our due diligence. It's one of the product areas where we have a lot of enthusiasm for ourselves.
Brooks, I'll just add to that, if you don't mind, Benson. We already, through the Vidacare product portfolio, have a call point within the military, and we have a strong relationship in that specific call point, which will only help us with the freeze-dried plasma opportunity. That was a key part of our focus as well.
Great. Very helpful, guys. Congratulations again.
Thank you.
Thank you. Our next question comes from Lawrence Keusch with Raymond James. Your line is now open.
Hi. Good morning. Congratulations.
Good morning.
Good morning, Larry. Thank you.
A couple of quick questions. First, could you talk a little bit about the double-digit growth that you've talked about for Vascular Solutions over the past decade? Again, I'm not that familiar with the company, but what's been the organic profile of growth for the company?
It has been almost all organic. They made a small acquisition a couple of years ago, a company that had some technology that was based out of Ireland. Other than that, it has been pretty much organic. Some of the key products within their portfolio that is driving that growth, Larry, is a product called GuideLiner, which is in the interventional cardiology suite, and a Turnpike catheter that was launched in the last year, which is driving over 300% growth year-over-year. An exciting portfolio of products. They also have a range of micro-introducer kits that are growing quite well. All of these are in the high single up into the double digits. The vein reprocessing through Q3 was about 20%. Micro-Introducer is over 20% as well. Radial access products growing in the mid-teens.
Most of it has been organic, Larry, which is clearly something that we are quite excited about. On top of that, they have a robust pipeline of R&D products coming through. For the GuideLiner, they just recently launched the TrapLiner, which will extend the life of that GuideLiner product and actually make it attractive to a broader range of interventional cardiologists.
Okay, terrific. Then two other questions. You mentioned, Tom, the $40 million-$45 million in synergies. I am wondering if you could help us understand what is captured in driving that number and where could there be potential opportunities to do better than that?
Sure. As you can imagine, we are going to look at all aspects of combining the two businesses. We see opportunities in the revenue line, supply chain, and SG&A. We would love to provide a lot of detail on the transaction. What we would like to first do is be able to close it, work through the integration planning and be in a position then to provide more specific details. As far as timing, our expectation is to close sometime in the first half. We are currently talking about an analyst day event, probably May timeframe. I think that would provide both the right forum and timing to go into a lot more specifics on the opportunities.
Last one, perhaps this is for Benson or Liam. Obviously, you already touched upon the OUS opportunities and the strength of the distribution that Teleflex has. Could you maybe just walk through, I know you mentioned product registrations in China, but where do you see the geographic opportunities to take the Vascular Solutions products and put it through your existing channels?
We'll be working through that as we work through our integration plan, Larry. Clearly we have a very broad footprint in key markets in Europe. We are direct in some of the key markets now in Asia as part of our dealer-to-direct strategy. Each one of those markets will be a potential opportunity for us.
Terrific. Thanks, guys. Congratulations again.
Thank you, Larry.
Thank you, Larry.
Thank you. Our next question comes from Kristen Stewart with Deutsche Bank. Your line is now open.
Hi, thanks for taking my question.
Good morning.
Good morning. Just with respect to the transaction, can you give us a little bit of, I guess, background on whether this was a competitive process and just kind of why now, I guess, in terms of moving forward with this transaction relative to some other opportunities that might be out there?
I think the best answer to that probably can come from reading Vascular Solutions' own press release about their reasons for this being the time or inflection point where they wanted to sell the company. I think they're best served giving their answers to that. I think the primary reason to the last part of your question was this is the best strategic fit of all the various things we've looked at over the past, really since Vidacare, and had the best growth trajectory, I think the best improvement in terms of our overall margins and revenue advancement. We were, I think, much more excited about this opportunity than other things we've looked at.
Okay. Just in terms of the sales growth rate, I know that you'd mentioned this gives you, just want to make sure I understood, greater confidence in achieving the 5%-6% growth rate, or do you think that now it's a little bit more exceedable, I guess, looking out longer term, given the double-digit growth rate that this brings?
I certainly think that'll go into our calculation as we start to talk about our guidance into the future, yes.
Okay. Last question from me is, as you look at the broader landscape, does this really give you the critical scale that you think you need within interventional cardiology and peripheral? Because it just still seems like relative to some of the other players, you may still be subscale. Just in terms of the key markets of where now you'll participate, do you feel like you still have enough scale, or should we look to really see bolt-ons from here on out within these two areas, more specifically longer term?
Their strategy within this space has been remarkably like our broader strategy, which is to participate in segments where they really have a highly clinically differentiated product. They tend to be spaces that much larger players don't tend to spend as much time and resources on. Again, their track record, I think, more than establishes the fact that that's been a successful strategy for them. When we look at their ongoing R&D programs, they're in a number of really unique product offering areas that we think that they will be able to impact and we will be able to combine with them, enjoy a significant space in that call point.
Okay. Perfect. Thanks very much. Congratulations on the deal.
Thank you.
Thank you.
Thank you. Our next question comes from Matt Taylor with Barclays. Your line is now open.
Hi, thanks for taking the question. Can you hear me okay?
Yeah.
Yeah.
Great. The first question I had, I guess I wanted to know if you could talk on a high level just in terms of where those synergies are going to come from. I know you said you're going to get detailed plans later, but $40 million-$45 million is kind of a high number on a revenue base of $165 million or looking at COGS. I'm assuming that you've got a substantial portion of that baked in as revenue synergies. I guess, can you just talk about the components at a high level to help us understand why you can get that big of a number?
As we look at the synergy opportunity, certainly revenue is one component of it, but we see greater opportunity elsewhere as we look to combine the two businesses. Revenue is a piece, but not the largest of the synergy opportunities.
Okay. Your closing date's pretty soon here, so I'm assuming there's no overlap. I just wanted to know if you had looked through all the different products and felt like there was anything you might have to divest, because there's a lot of little products here, and kind of tough to analyze where the overlaps would be.
It's our view that there is no significant overlap that would cause a divestiture of any of the key product categories. Obviously, we'll refine that as we go through this closing process, but we don't anticipate any issues there.
Okay, thanks. I think that's it for me.
Thank you. Our next question comes from David Lewis with Morgan Stanley. Your line is now open.
Good morning.
Good morning.
A few questions here. Sorry, may ask a few here. First thing, Benson, just, this is a 16% premium over the 90-day trading price and an even narrower premium over the 30-day trading price, maybe even single digits, double digits, which is exceedingly rare. Obviously, it makes you look good as a buyer, but what's your conviction that you sort of understand the trajectory that this business can continue to deliver double-digit revenue growth in light of the very narrow premium you're paying for the business?
In a couple words, very high. We've spent a lot of time looking at each one of these business lines, where their growth is coming from, where their future growth is coming from. I would say we went through, as you might imagine, a very thorough due diligence process. We have no belief whatsoever that our premium or the modest premium we're paying is a result of some unforeseen or undisclosed problem that exists under the covers.
Okay. That's helpful. No, sorry, Benson, I want to hear what you have to say. I think I got it. It's actually very clear, I think what shareholders wanted to hear. Tom, it's a good synergy number. The accretion is reasonable for the forward year. I guess in our model, if I go out to year 4, I know you're not going to disclose what your cost of capital is, but if I just assume that cost of capital is something close to 8%, we can't get there based on the synergies that you're offering. In year 4, is there some reason to believe that there's a material step-up in synergies above that sort of $40 million-$50 million level?
Is there a tax dynamic to this transaction that we're probably not appreciating that gets you to that sort of 8%+ number in year 4? Because we're kind of getting something that's closer to 4%-5%. I had one quick follow-up.
We do not expect to realize a meaningful tax benefit. Really what's driving the accretion and the value in the out years is a combination of continued revenue growth, margin expansion, and synergies, which, to the point you're raising, there is a certain level by 2018. We expect those to continue to build for the next couple of years as all the integration planning is fully realized.
Okay. By our math, you need a number that's well in excess of $60 million in synergies in 2019 and beyond to get anything close to 8%. Does that kind of jive with your math? Because that's a 50% increase from the $40 million level of the year prior.
Well, I'll defer on responding to that. We're going to guide to the numbers we've guided to now and provide more specifics as we finish the integration planning and lay out a detailed timeframe for all the synergies sometime later in 2017.
Okay. Very clear. Lastly, Benson, just for you, I think you made some statements in the third quarter call that got a lot of investor interest. I think they were something around your interest in getting back to the U.S. I think people interpreted that as a greater interest in the U.S. and less of an interest ex-U.S. and emerging markets. Here you are acquiring your largest acquisition in history, which is 80% U.S. Maybe just I wonder if you could expound upon, is that a real driver here, the fact this business has a really big U.S. mix? Was that attractive to you about this asset? Then also comes to mind that this company has a dramatic amount of distributors ex-U.S., and given your success with distributor conversions, there may be a significant opportunity ex-U.S.
Could you just juxtapose sort of your interest in the U.S. market versus sort of that ex-U.S. opportunity that Vascular Solutions could offer? Thank you.
Thanks, David. My statements on the call really reflected a somewhat longer-term view about looking for growth in geographies and product lines that we thought were most sustainable over a long period of time. Certainly, when we look at an acquisition of this size, sustainability of growth and less exposure to volatility is an important ingredient just in terms of what we're factoring. That being said, we also think in this particular case, there is a good opportunity for us to expand in the international front. Certainly in many of the markets where we have identified as places where we are interested in China, India, as an example.
Okay. Thank you very much.
Thank you. Our next question comes from Dave Turkaly with JMP Securities. Your line is now open.
Thanks, congrats. Looking at these products, they seem to be very similar from our standpoint, would appear to be similar from a manufacturing standpoint. I was curious, how many facilities does Vascular Solutions have, and could manufacturing consolidation be part of the synergy number as well?
Vascular Solutions has six in total. About three of them are manufacturing facilities. They are consolidated in the Minneapolis area. Obviously, as we go through our integration plans and as we close this, we'll give more details as to what our proposals are. They have a very robust manufacturing organization, and we think that they have done an excellent job. They manufacture very efficiently. These are accretive margin products because of that. They have six facilities in total to answer your question.
Thanks for that. Maybe just one quick one from the modeling side. In terms of your sort of revolver and then the incremental debt, can you just offer us a ballpark of what kind of rate you think you'll be paying on the outstanding debt post the deal?
The revolver borrowings, it's obviously a LIBOR-based structure. Right now, we would think that it would be in or around somewhere around the 3% level all-in on the revolver and term loan side based on where our leverage ratios are.
For modeling purposes, we have considered the possibility that we could go on and put a high yield offering out there. We've considered the higher rate associated with that and expect that potentially to be in the range of 5.5%.
Great. Thanks a lot.
Thank you. Our next question comes from Richard Newitter with Leerink Partners. Your line is now open.
Hi. Thanks for taking the question and congrats on the deal.
Thank you.
Wanted to just ask two here. First, just maybe you could, at a high level, just compare or tell us what's most similar or different with respect to the integration process you foresee with Vascular Solutions compared to Vidacare and LMA, which were two very successful integration efforts, as you pointed out. Maybe just for investors to help us get a feel for how similar the process will be compared to those that increases your confidence that we'll see a similar kind of delivery on the targets you laid out. Maybe just with that, can you remind us what your targets were for accretion on Vidacare and LMA and kind of what actually out-performance transpired looking back?
I think that as we look at this, we see this as being quite similar to the LMA transaction from the point of view of our approach. Slightly larger business than Vidacare, a more of a global footprint. Both companies have a global footprint, a large number of distributors overseas, and as you know, the LMA integration was a very successful one. Our management teams have become very adept at the integration process, the timing of it, the execution, and I'm not in a position to give you a specific number, but both LMA and Vidacare over-delivered versus our expectations from when we began the process to when we finished the process.
Okay. I guess there's nothing in this transaction that you think is necessarily particularly better that you think LMA was tricky for X, Y, and Z reasons. Vascular Solutions will be even easier to integrate for some other kind of thing that we're not thinking about or vice versa. Is there anything that's maybe a little bit more challenging that you foresee compared to something like LMA or they're pretty similar?
No, I would see them as pretty similar. LMA's revenue generation and focus was in a narrow range of products. 80% of Vascular Solutions revenue comes from eight product categories. From that regard, very similar to LMA. Vidacare was a narrower product portfolio. There was three main product categories within Vidacare, but we were very successful with LMA, we see this very similar to that.
I think one addition to this is neither LMA nor Vidacare had nearly as substantial portfolio of future R&D products in the mix. We've had a good opportunity to get to meet their key R&D team members. We're quite enthusiastic about their potential to bring these products to market. Does that make it a little more challenging? Perhaps, but I think that what we're really enthusiastic about is the opportunity that's contained within their new product shop.
That's helpful. Benson, just on that, do you have any sense as to timelines as to when some of those bigger R&D initiatives could kind of see their way moving to market? Is that something we should think about 2019 and beyond, or could these actually materialize in the synergy target timeframe you've laid out?
There's a good spread in terms of the timing of these products. Some of them will hit as really soon as 2017. Liam referenced a product called the TrapLiner, which is just in the launching period right now. There's a pretty good calendarization. It's not all 2019, for sure. It's a good spread in terms of the calendarization of those events.
Thanks.
Thank you. Our next question comes from Mike Matson with Needham & Company. Your line is now open.
Hi. Thanks for taking my questions. I guess I was just curious, with regard to Vascular Solutions, if Howard Root's going to be sticking around. I think he was a pretty key part of their success over the years, and I know he had his hands in inventing a number of their key product lines. Thanks.
Again, I would refer you to their own press release regarding Howard's plans and rationale. It was certainly one of the questions we asked. We agree that he certainly has played an instrumental part. As he was going through his own legal difficulties, he had to entrust a good part of the day-to-day operating functions and product designs to others within the organization. I will tell you, we were impressed at how ably they were able to perform while his interest and attention was elsewhere. We're quite comfortable and confident in the management team he's built up there in terms of being able to move that company forward.
Okay, thank-
We have some modest expertise in that own area ourselves, which we will lend to the picture.
Okay, thank you. Is there any overlap at all between the two companies' product lines? Is there any risk that you have to make any divestitures of any of the vascular products or your own products?
As I answered earlier, we don't see that at this moment in time. Both sets of products are very complementary. We don't see any difficulties with divesting of any part of either portfolio as we go through this, which is one of the attractive elements of this acquisition for us. We'll work through that as we close this, but none anticipated.
Okay. Just finally, Vascular has been really focused on kind of the niche opportunities within interventional cardiology and peripheral vascular. Is your intention to kind of maintain that focus, or are you trying to really build out a kind of a broad-based interventional cardiology and peripheral business here with these product lines as kind of a starting point?
Just as evidenced by our strategy and our other business lines, we like those niche products where you have long product life cycles, where there tends not to be as much direct competition, which gets down to simply price. They've done a really good job with that strategy on their own, and that's really where their R&D is primarily pointed towards in the future.
All right, thanks. Thanks a lot. Bye.
Thank you. We have a follow-up question from Kristen Stewart with Deutsche Bank. Your line is now open.
Hi, thanks for taking the follow-up. Liam, I just wanted to go back again. I know we're talking about the pipeline, but in terms of the existing portfolio, where do you expect to see most of the growth in terms of these top eight products? Are they mainly coming from more of the interventional cardiology business or more of the kind of peripheral side? Maybe just help us understand, where do you see the greatest growth opportunity?
We think that there is significant longevity in the GuideLiner, especially with the TrapLiner that is just being launched as we speak. That is in the interventional cardiology space. We also think that the Turnpike that is in its first year of launch, which is in the interventional cardiology space, has significant growth opportunity over a multi-year period. Those are within the interventional cardiology. We also think that in the interventional radiology space, the micro-introducer kits, we think that has opportunity outside of the U.S. that we will be exploring. To date, Vascular Solutions have predominantly focused that in the U.S., clearly with our channel within the interventional radiology space, we see that as an opportunity.
Okay. Are there any products within the portfolio that you don't think make sense that might be potential opportunities for pruning down the road?
Not at this moment in time. Most of their portfolio we see as making perfect sense to Teleflex as they did for Vascular Solutions, we don't see any divestiture at this stage.
Okay. Perfect. All right. Thank you.
Thank you. That concludes our question and answer session today. I would like to turn the conference back over to Mr. Jake Elguicze for closing remarks.
Thanks, operator, thanks everyone for joining us on the call today. This concludes the Teleflex Incorporated conference call. Have a good day.
Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, and you may now disconnect. Everyone, have a great day.