Photomedex says to build on newly acquired eye surgery firm
TEL AVIV, June 17
TEL AVIV, June 17(Reuters) - Skincare company Photomedex is looking to leverage the dozens of new clinics it gained across the United States in its recent purchase of eye surgery firm LCA-Vision to boost revenue from its skin disease treatments.
Photomedex, which is dual listed in Tel Aviv and on Nasdaq, spent $106 million to buy LCA-Vision, formally listed on Nasdaq, whose stockholders approved the deal last month.
That could be seen as a discount, said Dolev Rafaeli, chief executive of Photomedex, since the deal happened in a tough economy when laser eye surgeries were at a low.
There were about half the number of eye surgeries last year as there was before markets were hit by a global financial crisis, he said. As the economy and consumer confidence bounces back, he said there is no reason the numbers will not to return to those levels as well.
The acquisition will also shift some focus away from what has been the firm's main stream of income - medical devices, like hair removal products that are sold to consumers for aesthetic purposes. That sector brought $188 million in sales last year.
"It is a cash cow. We control this market today. It is not going to go away, but we can't make that market grow faster than it grows today," Rafaeli told Reuters in an interview.
Photomedex's products and services for treating skin diseases, like psoriasis, which are used by physicians, have been a smaller, though growing, generator of revenue.
The acquisition of LCA-Vision will boost this sector by broadening the company's reach and by allowing cost cuts, Rafaeli said.
"(This) is a market we can control. And we will control, by growing it, by adding more clinics, whether they are consignment or owned clinics, and by combining the infrastructure that support these two things," he said.
Photomedex had record revenue last year, up 2 percent to $224.7 million, though its 2014 first quarter revenue of $50.1 million was down 12 percent from the previous year.