Cynosure Acquires Palomar Medical Technologies

Cynosure Inc., a Westford, Mass.-based medical laser technology company, is acquiring Palomar Medical Technologies Inc. for $294 million. Palomar is focused on the same technology as Cynosure, which typically is used for cosmetic and plastic surgeries, and is based in Burlington, Mass.

Cynosure expects the acquisition to effectively function as an expansion of its existing portfolio and customer base. The acquisition also will add more than 40 patents in Cynosure’s portfolio, thereby boosting its intellectual property position.

Under terms of the deal, Cynosure will issue 5.2 million shares, which will bring in approximately $120 million. The rest of the purchase price will be made through existing cash reserves. The purchase price is at a premium of 23 percent above Palomar’s average closing price, and 34 percent above the company’s average enterprise value, according to its reported 2012 fiscal results.

Both company’s boards of directors have voted unanimously in favor of the deal, which is expected to close by the end of this year. Cynosure officials have reported that there are some projects in the works that will be accretive to its 2014 performance. Post-acquisition, the cash balance of the company is expected to be around $87 million and it will remain debt-free, officials said.

Together, Cynosure and Palomar reportedly have an installed base of more than 20,000 aesthetic laser systems with a distribution network across more than 100 countries worldwide. The collective revenue for both companies in fiscal 2012 was $234 million, of which 52 percent was attributable to North America and the rest from the international markets.

Cynosure makes non-invasive and minimally invasive products to rejuvenate skin, treat vascular and benign pigmented lesions, reduce cellulite, remove hair and treat onychomycosis (a fungal infection of the nail).