Cynosure buying Palomar Medical in $294M dealAP , Associated Press
Mar. 18, 2013 8:59 AM ET
NEW YORK (AP) — Cynosure is buying Palomar Medical Technologies Inc. in a cash-and-stock deal valued at about $294 million.
Both Cynosure and Palomar's products include cosmetic laser and intense pulsed light systems.
Cynosure Chairman and CEO Michael Davin said in a statement on Monday that the deal will provide it with complementary products, strengthen its global distribution network, create new cross-selling opportunities and give it more than 40 additional patents.
Davin will serve as chairman and CEO of the combined company.
Palomar Chairman, President and CEO Joseph Caruso will become vice chairman of Cynosure's board once the acquisition closes and will serve as president. Timothy Baker, executive vice president, treasurer and chief financial officer at Cynosure, will serve as executive vice president, chief operating officer and CFO of the combined company.
Both companies' boards unanimously approved the deal, which is expected to close in the third quarter. It still needs the approval of Cynosure and Palomar shareholders.
Cynosure said that it plans to relocate its headquarters from Westford, Mass., to Palomar's facility in Burlington, Mass.
Under terms of the deal, Palomar shareholders will receive $13.65 per share. This includes $6.825 per share in cash and $6.825 per share in Cynosure stock. The $13.65 per share is an 8 percent premium to Palomar's Friday closing price of $12.62. The companies put the cash portion of the transaction at approximately $147 million.
Shares of Palomar added 80 cents, or 6.3 percent, to $13.42 in premarket trading.
Palomar currently has about 20 million outstanding shares, according to FactSet.
Cynosure Inc. said that it plans to fund the cash portion of the acquisition through existing cash balances. It will issue approximately 5.2 million shares in the transaction.
The buyout is expected to add to Cynosure's earnings in 2014.
Once the acquisition closes, Cynosure stockholders will own about 77 percent of the combined company and Palomar stockholders will own approximately 23 percent.