CONMED Corporation is acquiring privately-held Buffalo Filter LLC (Buffalo Filter) for $365 million on a cash-free, debt-free basis. The transaction is expected to be financed through a combination of new convertible notes and an expanded and amended credit facility. The transaction is subject to customary closing conditions, including receipt of U.S. regulatory approval, and is expected to close in the first quarter of 2019.
 
Founded in 1991, Buffalo Filter, part of Filtration Group, is the market leader in surgical smoke evacuation technologies. The company’s comprehensive product portfolio includes smoke evacuation pencils, smoke evacuators, and laparoscopic solutions.
 
“This acquisition is a strong strategic fit with our General Surgery portfolio, and the platform technology provides us a leading position in the high-growth smoke-evacuation market,” commented Curt R. Hartman, president and CEO of CONMED. “We believe this technology, combined with our focused innovation in the surgical suite, will deliver impactful solutions to address significant challenges confronting healthcare practitioners and their patients. We look forward to welcoming Buffalo Filter’s talented team to CONMED.”
 
Samantha Bonano, president and CEO of Buffalo Filter, added, “We are excited to join CONMED and continue our mission of improving safety in the operating room. We believe that the combination of our teams, as well as our research and development expertise, will enable us to continue to bring best-in-class smoke-evacuation products to a growing global market.”
 
In conjunction with the acquisition, the company is reiterating previously issued financial guidance for 2018. Going forward, the acquisition is expected to improve the profitability profile of CONMED by adding approximately 50 basis points to the organic constant currency revenue growth of the company. The impact on overall gross margins is expected to be neutral in 2019 and accretive thereafter. The acquisition is expected to improve adjusted operating margins of the company by approximately 100 basis points in the first year and an additional 100 basis points by year three.
 
Based on the anticipated date of closing, CONMED expects the acquisition to be neutral to adjusted cash earnings per share in 2019 and between 10 cents and 15 cents per share accretive in 2020. On a GAAP basis, the transaction is expected to be dilutive in 2019, and less dilutive or increasingly accretive thereafter, due to estimated amortization expense and acquisition-related net charges, which are based on a preliminary valuation and are subject to change.
 
Barclays Capital is acting as financial advisor, Sullivan & Cromwell LLP is acting as legal counsel, and J.P. Morgan is leading the financing for CONMED in connection with the transaction. Goldman Sachs is acting as financial advisor and Paul Hastings LLP is acting as legal counsel for Filtration Group in connection with the transaction.

CONMED is a medical technology company that provides surgical devices and equipment for minimally invasive procedures. The company’s products are used by surgeons and physicians in a variety of specialties, including orthopedics, general surgery, gynecology, neurosurgery and gastroenterology. CONMED has a direct selling presence in 19 countries, and international sales constitute approximately 50 percent of the company’s total sales. Headquartered in Utica, N.Y., the company employs approximately 3,100 people.

For over 25 years, Buffalo Filter has been a globally recognized brand in surgical safety. Dedication to improving healthcare safety and a strong commitment to quality, inspired the launch of cutting-edge innovations in surgical smoke evacuation and laparoscopic surgery solutions. Buffalo Filter’s education program has changed the way the global healthcare community sees surgical smoke.