Date: Mar 18, 2013 Author: Maureen McCartyh Source: bizjournals (
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Today's cosmetic treatment market boasts a plethora of laser technologies including age spot and hair removal; tattoo augmentation and scar and vascular lesion reduction. These cosmetic procedures are widely available and represent a multi-billion dollar industry.
Beauty treatment companies Cynosure Inc. (NASDAQ: CYNO) of Westwood and Burlington-based Palomar Medical Technologies Inc. (NASDAQ: PMTI), whose combined 2012 revenues equates to more than $234 million, announced they signed a definitive agreement for Cynosure to acquire Palomar in a cash and stock transaction valued at approximately $294 million.
Cynosure, which experienced significant stock gains in 2012, manufactures and markets light-based aesthetic and medical systems and holds 37 U.S. patents representing advanced levels of solid-state, liquid and semiconductor laser technologies.
Founded in 1991 and with an employee base of more than 200, Palomar Medical Technologies manufactures cosmetic equipment including lasers and intense pulsed light (IPL) systems.
The acquisition is scheduled to close third quarter 2013 and is subject to customary closing conditions, including Cynosure and Palomar shareholder approval and regulatory approvals. As of 11 a.m., Cynosure stock was up 45 cents per share at $28.9. Palomar stocks are up over five percent, hovering at $13.29 per share -- surpassing its previous year-to-date high of $12.80 per share.
In a 50/50 cash and common stock split, Palomar shareholders will receive $13.65 per share of Palomar common stock cash and Cynosure common stock. A total of 52 million shares will be issued by Cynosure via the transaction and fund approximately $147 million in cash consideration through existing cash balances.
Upon completion of the transaction, Cynosure's President, CEO and Chairman Michael Davin will serve as Chairman and CEO of the merged company while Palomar's Chairman, President and CEO Joseph Caruso will serve as president and join Cynosure's board of directors as vice chairman.
Davin said in a statement the pending acquisition of Palomar will promote innovation, stockholder value and support profitable and long term corporate growth.
"Combining with Palomar complements our product portfolio and customer base, adding new product and service revenues, strengthening our global distribution network, creating new cross-selling opportunities and enhancing our intellectual property position with the addition of more than 40 patents," Davin said.
Beyond strategic positioning, Davin said the companies are excited to join forces.
"Palomar products such as the Icon and Starlux Laser and Intense Pulsed Light (IPL) Platforms and the recently introduced Vectus Diode Laser for permanent hair reduction have established Palomar's reputation for excellence around the world. This commitment is also reflected in proprietary technology that enables physicians to ensure patient safety and comfort through advances in intelligent energy delivery, skin cooling, and temperature control," Davin said.
The newly merged organization is scheduled to move its headquarters to Palomar's owned Burlington facility. The acquisition supports innovation, strategic growth and provides "exciting opportunities for employees," said Caruso in a statement.
"Our board of directors and management team believe that this transaction makes strategic sense for our company, offers an attractive premium to our shareholders and creates exciting opportunities for our employees," Caruso said. "Both companies share the same passion for innovation, and this combination creates a single, unified organization that is positioned for continued success."
