US cosmetic laser manufacturer Cynosure to buy rival Palomar Medical

Cynosure Inc, a US manufacturer of cosmetic, aesthetic and medical lasers, today said it is buying its rival Palomar Medical Technologies Inc, for about $294 million in cash and stock.

Cynosure will pay Palomar shareholders $13.65 per share - $6.825 per share in cash and $6.825 in stock, a premium of 8 per cent to Palomar's closing price on Friday.

Cynosure said it would fund the transaction by issuing about 5.2 million shares and use about $147 million of existing cash.

Palomar designs, produces and sells advanced cosmetic lasers and intense pulsed light systems to improve the appearance of women's and men's skin.

Palomar has pioneered the science of using lasers and light to improve appearances, including new aesthetic treatments such as advanced laser hair removal, laser liposuction, skin resurfacing, acne, laser treatments for scars, wrinkle treatment, stretch marks, and photofacials for pigmented and vascular lesions.

In June 2009, Palomar became the first company to receive from the US Food & Drug Administration an over-the-counter clearance for its new, patented, home-use, laser device for the treatment of fine lines and wrinkles around the eyes.

Founded in 1991, Cynosure develops and markets aesthetic treatment systems that are used by physicians and other practitioners to perform non-invasive and minimally invasive procedures to remove hair, treat vascular and pigmented lesions, remove multi-colored tattoos, rejuvenate the skin, liquefy and remove unwanted fat through laser lipolysis, reduce cellulite and treat onychomycosis.

Cynosure currently holds 37 US patents and markets over 14 different light based systems to customers in over 60 countries.

Cynosure and Palomar, both based in Massachusetts, have a total combined installed base of more than 20,000 aesthetic laser systems worldwide, with a distribution network that spans over 100 countries.

The combined 2012 revenue of the two companies was more than $234 million with 52 per cent of product revenue coming from North America and 48 per cent from international markets.

"Our board of directors and management team believe that this transaction makes strategic sense for our company, offers an attractive premium to our shareholders and creates exciting opportunities for our employees," said Joseph Caruso, chairman, president and CEO of Palomar.

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 Burlington.