UPDATE 1-PhotoMedex to buy skincare co for $174 mln

* To issue 14.5 mln shares of common stock to Radiancy shareholders

* To also issue 846,000 warrants to own shareholders

* Says Radiancy shareholders will own 75 pct of the combined company (Follows alerts)

July 5 (Reuters) - Skincare products maker PhotoMedex Inc said it will buy privately held rival Radiancy Inc for $174 million in stock in a reverse merger.

PhotoMedex will issue about 14.5 million shares to Radiancy shareholders and about 846,000 three-year warrants with an exercise price of $20 per share to its shareholders.

After conversion of PhotoMedex's common stock equivalents, Radiancy shareholders would own about 75 percent of the joined entity and PhotoMedex shareholders the rest.

PhotoMedex said the combined company will target global sales and professional skin-care markets, and has pro forma revenue of $132 million for fiscal 2011.

Radiancy is a developer and manufacturer of home-use and professional aesthetic and dermatological devices that help in treatments such is hair removal, acne reduction, skin rejuvenation and face lifting.

Photomedex shares closed at $11.99 on Nasdaq on Friday. (Reporting by Kavyanjali Kaushik in Bangalore; Editing by Don Sebastian)