* Cash-and-stock offer of $13.65/share at 8 pct premium
* Shareholders to receive $6.825 in cash, $6.825 in stock
* Cynosure to issue 5.2 mln shares to fund deal
* To pay about $147 mln from existing cash
March 18 Cynosure Inc agreed to buy
Palomar Medical Technologies Inc for $294 million to
expand its portfolio of light-based devices that are used to
treat scars and wrinkles.
The deal comes at a time when the market for non-invasive or
minimally invasive cosmetic procedures is recovering after years
of slow growth as the economic downturn forced people to put off
About 73 percent of surgical procedures in 2012 were
cosmetic, rather than reconstructive procedures, according to
data from the American Academy of Facial Plastic and
Reconstructive Surgery. ()
Palomar shareholders will get $13.65 per share - $6.825 per
share in cash and $6.825 in stock.
The deal price represents an 8 percent premium to Palomar's
Friday close. Shares of Palomar rose to $13.30 by midday on the
Leerink Swann analyst Richard Newitter said Palomar's
technologies would be leveraged better through Cynosure's
world-wide marketing and distribution network.
"The company had mentioned intense pulsed light (IPL)
technology as an area in which it would be interested, and given
Palomar's technology expertise in this segment, we view it as a
solid choice," he wrote in a note to clients.
Palomar's intense pulsed light (IPL) systems use many
wavelengths of light to treat skin conditions without affecting
the top layer of skin.
Cynosure said it would issue about 5.2 million shares for
the deal and fund about $147 million through existing cash.
Palomar Chief Executive Joseph Caruso will join the Cynosure
board as vice-chairman and serve as president of the company.
Cynosure said it plans to relocate its headquarters from
Westford, Massachusetts to Palomar's facility, 15 miles away in
The deal, which is expected to close in the third quarter of
2013, has been approved by the boards of both companies.
Leerink Swann was Cynosure's financial adviser on the deal,
and Hinckley, Allen & Snyder was legal counsel. Canaccord
Genuity advised Palomar, while WilmerHale served as legal
Cynosure shares were down 4 percent at $27.29 on the Nasdaq.