Cynosure, Inc. (CYNO) announced Monday that it agreed to acquire Palomar Medical Technologies, Inc. (PMTI) in a cash and stock transaction valued at approximately $294 million.
Palomar shareholders will receive $13.65 per share of Palomar common stock: $6.825 per share in cash and $6.825 per share in Cynosure common stock. Cynosure said it will issue approximately 5.2 million shares in the transaction and fund the approximately $147 million in cash consideration through existing cash balances.
The acquisition price of $13.65 represents a premium of approximately 23% above Palomar's average closing price and a premium of approximately 34% over Palomar's average enterprise value , excluding cash, since the announcement of Palomar's 2012 year-end results on February 7, 2013.
The acquisition is expected to be accretive to Cynosure in calendar 2014 with the implementation of $8 million to $10 million in projected synergies. The combined company will have approximately $87 million in cash and no debt on a pro forma basis for the transaction as of December 31, 2012.
The transaction has been unanimously approved by the board of directors of each company. The transaction is expected to close in the third quarter of 2013.
The transaction is subject to customary closing conditions, including Cynosure and Palomar shareholder approval and regulatory approvals. Upon completion of the transaction, Cynosure shareholders will own approximately 77% and Palomar shareholders will own approximately 23% of the combined company.
Upon completion of the transaction, Davin will serve as Chairman and Chief Executive Officer; Caruso will join Cynosure's Board of Directors as Vice Chairman and will serve as President; and Timothy Baker will serve as EVP, Chief Operating Officer and Chief Financial Officer.
Cynosure said it ultimately plans to relocate its headquarters from Westford, Massachusetts to Palomar's owned facility 15 miles away in Burlington, Massachusetts.
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