US-based medical device company Teleflex has agreed to purchase Palette Life Sciences for an upfront cash payment of $600m and up to $50m in commercial milestone payments.

Palette Life Sciences is an integrated medical device company that provides a wide range of products and services for improving the patients’ quality of life.

The company’s lead product, Barrigel, is a non-animal stabilised hyaluronic acid (NASHA) spacer, which has been approved in the US, Australia, and the EU.

Palette’s portfolio also includes other NASHA-based tissue bulking agents, Deflux and Solesta to treat paediatric vesicoureteral reflux and faecal incontinence, respectively.

The acquisition is expected to be completed in the fourth quarter of this year, subject to customary closing conditions, including receipt of certain regulatory approvals.

Teleflex intends to finance the transaction using borrowings under its revolving credit facilities and available cash on hand.

Teleflex chairman, president and CEO Liam Kelly said: “Teleflex is focused on deploying capital for innovative products and technologies that can meaningfully enhance clinical efficacy, patient safety and comfort, reduce complications, and lower the overall cost of care.

“The acquisition of Palette Life Sciences will allow us to incorporate this exciting technology into our Interventional Urology business unit and bring urologists, radiation oncologists, and other specialists more innovative technologies that can positively impact patient care.

“The transaction is consistent with our strategy to acquire assets that are accretive to Teleflex’s growth rate.”

Teleflex said that the acquisition of Palette Life Sciences will expand its Interventional Urology portfolio, which includes the UroLift System.

The transaction will add Palette’s NASHA spacer and tissue bulking products that improve urology and urogynecology disorders, colorectal conditions, and radiation oncology procedures.

The Barrigel is a rectal spacer used for reducing the radiation delivery to the rectum during prostate cancer radiation therapy.

It is an easily sculptable, highly visible on transrectal ultrasound (TRUS), biodegradable, reversible rectal spacer, that offers one-step assembly in all sites of service, said Teleflex.

Kelly added: “We expect the acquisition will be immediately accretive to adjusted gross margin and will enhance our adjusted operating margin in the near term. We believe Palette Life Sciences will be a meaningful contributor to our growth in the coming years.

“In 2024, we expect this business will achieve year-over-year revenue growth in the high-teens to low 20% range, which gives us further confidence in our ability to deliver on our 2023-2025 LRP financial objectives.”