Teleflex Inc. (NYSE:TFX) says it’s a pure-play medical device company now that it’s re-classified its cargo systems business as a discontinued operation, marking the culmination of a years-long transformation.
The Limerick, Pa.-based company also said it paid off $125 million worth of debt ahead of schedule, as it positions itself to grow via acquisition.f
“With our term loans maturing in 2014, the recently completed refinancing transactions provide us with additional resources at historically low interest rates to execute our growth strategies,” CFO Richard Meier said in prepared remarks.
Still, chairman president and CEO Benson Smith seemed chuffed about the announcement.
“With this decision, I am pleased to announce that we have completed the long journey of transforming the Company’s continuing operations from a cyclical, diversified-industrial conglomerate to a pure-play medical technology company,” Smith said in prepared remarks.
The tone was different on Wall Street, where investors seemed indifferent. TFX shares closed down 0.23 percent today, at $59.81. Leerink Swann analyst Richard Newitter, in a note to analysts, said he thinks the moves toward pure-play status and the debt paydown will pay off farther down the road.
“In the long run, these moves should better position TFX to re-invest in faster-growing, more profitable medical segments, ultimately helping the company achieve long-term sales and profit goals,” Newitter wrote. “Several events will have to occur in order for TFX to achieve our new 2012 estimate [of $4.05-$4.25], but these mostly seem to us to be within relatively close reach.”