Teleflex Inc. has agreed to buy Arrow International Inc. for about $2 billion in cash. The buyout underscores Teleflex''s shift toward medical products in an effort to secure higher profit margins as part of its restructuring process.

With Arrow''s acquisition, Teleflex''s medical division''s annual revenues will jump to $1.5 billion, about 45 per cent of the overall company revenue. Arrow is based out of Reading, PA, and makes disposable catheters and other devices for cardiac and critically ill patients.

The medical division will now trump the aerospace and commercial divisions of Teleflex, with profile margins of about 20 per cent. Last year, the medical division booked $162 million in operating profit, about 18 per cent on revenues of $859 million.

Teleflex has seen two restructuring exercises since 2004, incurring over $100 million in charges, of which about 40 per cent apply to its medical division. The extremely diverse conglomerate makes and distributes practically everything, from airline cargo-handling systems to marine engine parts. Its fastest-growing business, however, is the medical services wing, with products such as breathing tubes and surgical instruments.

Teleflex will pay $45.50 a share in cash for Arrow, marking a 20 per cent premium to Arrow''s closing share price Friday.