Iridex Buying Laserscope Aesthetics Unit
Therapeutic-based laser systems maker Iridex Corp. announced that it will acquire the laser aesthetics business of Laserscope, a provider of medical laser systems. The $28 million stock-and-cash transaction will nearly double its revenue in 2007, Iridex said.
Under the deal, San Jose-based Laserscope's parent company, American Medical Systems Holdings Inc. of Minnetonka, Minn., will sell Iridex certain Laserscope assets and liabilities dealing with laser systems for surgical and aesthetic applications, including four patents, a license to an additional nine patents, and a license under the Palomar hair removal patents. Iridex will pay approximately $26 million in cash and $2 million in shares of its stock, subject to post closing adjustments. In addition, at the close of the transaction, Iridex will acquire between $7.3 million and $9.5 million in Laserscope net assets.
Laserscope's aesthetics business develops light-based systems for non-surgical aesthetic procedures, primarily cosmetic treatments of skin conditions such as the removal of vascular lesions, red veins on the legs and face, port wine stains and pigmented lesions, wrinkles, leg veins, hair removal, enhanced skin rejuvenation and skin resurfacing.
"We believe this acquisition will provide significant growth opportunities for our dermatology business and allow us to become one of the key players in the estimated $750 million global aesthetics laser market, as well as provide a platform for continued growth in ophthalmology," said Barry Caldwell, president and CEO of Iridex. "In addition, we will acquire a direct sales, clinical and service presence in the international aesthetics markets, which will expand our current international dermatology business beyond its current limited focus. We believe this acquisition will also help expand the support we provide to our present international distribution channels in the ophthalmic segment."
Caldwell said Laserscope's aesthetics business generated revenue of $37.8 million in 2004 and $36.9 million in 2005.
Because of similarities between the two companies' manufacturing processes, Caldwell said he expected that Iridex could integrate Laserscope into its Mountain View facility, which has unused capacity. "Laserscope has a very experienced team of field service engineers who have developed an excellent reputation for customer support. The addition of this team in the field should allow Iridex to further enhance support to our ophthalmic customer base in the future," Caldwell said.
The market for aesthetic lasers has been growing rapidly, primarily due to the aging population, heightened consumer awareness and increased demand for cosmetic services. According to published reports, in 2006 the worldwide aesthetic laser market size is expected to be more than $750 million, growing to more than $950 million in 2008 and nearly $1.1 billion in 2009.
Iridex said it will use a combination of cash and bank financing to close the transaction. The company's board of directors unanimously approved the deal, which subject to regulatory approval and is expected to close by early January.
For more information, visit: www.iridex.com
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