Sep 9 2009
Syneron Medical Ltd. (NASDAQ:ELOS) and Candela Corporation (NASDAQ:CLZR) announced today that they have entered into a definitive agreement to combine the companies in an all stock transaction. This strategic combination, unanimously approved by the Boards of Directors of both companies, will create a global leader in medical aesthetic devices. The transaction is expected to be completed by year-end 2009.
Under the terms of the merger agreement, Candela shareholders will receive 0.2911 ordinary shares of Syneron for each share of Candela common stock they own. Based upon the closing stock price of Syneron common stock on September 8, 2009, this represents $2.84 per share of consideration to be received by Candela shareholders, or a total consideration of approximately $65 million. The consideration represents a premium of approximately 51% to the closing stock price of Candela common stock on September 8, 2009. It is anticipated that the transaction will be tax free to Candela shareholders. Syneron shareholders will retain their shares.
“The combination of Syneron and Candela brings together two well-respected industry leaders in aesthetic medical devices,” said Louis P. Scafuri, Chief Executive Officer of Syneron. “The product portfolio and commercial infrastructure of Syneron and Candela are highly complementary. The combined company will be extremely well positioned to benefit from an improving macroeconomic climate. We are going to take our time to build the right customer-focused organization for long-term growth and market leadership. At this initial stage, we are less concerned with driving immediate synergies that might risk disruption and compromise our ability to take advantage of the opportunities ahead.”
Scafuri continued, “Candela has been a pioneer in our industry for nearly 40 years. We highly respect the achievements of Candela’s leadership team and look forward to welcoming Candela’s world-class sales force and product development organizations to Syneron where they will play a crucial role in our future success. We are committed to maintaining the integrity of the Candela brand and its long standing reputation for quality, efficacy and unparalleled customer support. I would like to recognize the Syneron team for enabling us to be in a position to take this important step in the development of our company.”
“This transaction is a positive outcome for our shareholders, employees and customers,” said Gerard E. Puorro, President and CEO of Candela. “This combination creates an industry global leader with the critical mass, product portfolio, culture of innovation and financial strength required to succeed in the current market environment. The transaction provides our shareholders with attractive value today, as well as an opportunity to participate in the long-term prospects of the combined company.”
The new company will have proforma annualized revenue totaling over $180 million, based on the quarter ended June 30, 2009, ranking it among the leading medical aesthetic device companies in the industry. The combined company will have a global presence, with approximately 62% of revenue generated from outside the United States, as well as a balanced customer mix between “core physicians” (dermatologists and plastic surgeons) and “non-core physicians” with an approximate split of 55% core and 45% non-core. The company expects to generate a meaningful amount of recurring revenue in the future, with Candela’s service revenue complementing Syneron’s recently announced initiative to shift toward a consumables-oriented business model. The combined company will have significant financial strength, with more than $240 million in cash and no debt on a proforma basis as of June 30, 2009.
www.syneron.com