A Medical Device Daily
Syneron Medical (Yokneam, Israel) and Candela (Wayland, Massachusetts) reported 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 both companies, will create a global leader in medical aesthetic devices. The transaction is expected to be completed by the end of the year.
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 nearly $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 new company will have proforma annualized revenue totaling more than $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 about 62% of revenue generated from outside the U.S., 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.
In other dealmaking activity: Covidien (Mansfield, Massachusetts), a provider of healthcare products, reported that it has completed the previously reported acquisition of Power Medical Interventions (PMI; Langhorne, Pennsylvania) for an aggregate consideration of nearly $65 million, including assumption of debt (Medical Device Daily, July 30, 2009).
The tender offer expired at midnight EST, at the end of Sept. 4. At that time, the depositary for the offer advised Covidien that 15,210,583 shares of PMI had been validly tendered and not withdrawn, representing nearly 87% of the outstanding PMI common shares.
All shares that were validly tendered and not withdrawn were accepted for purchase and paid for in accordance with the tender offer. An additional 247,765 shares, or about 1.4% of the outstanding PMI shares, had been tendered pursuant to notices of guaranteed delivery.