PhotoMedex, a skincare company that is traded on both the Tel Aviv Stock Exchange and the Nasdaq exchange in the United States, announced early Friday that it had signed a definitive agreement to acquire LCA-Vision, which provides laser vision correction services under the LasikPlus brand.
The purchase price is $5.37 per share, or about $106.4 million in cash. That’s a premium of 26% over LCA’s closing price on the Nasdaq exchange on Thursday, and follows a jump of 6.2% in the company’s share price immediately prior to the announcement.
The acquisition is subject to customary closing conditions including shareholder approval, PhotoMedex said.
It is also subject to an option on LCA’s part to find a better offer within 30 days. PhotoMedex shares closed 1.30% higher on the Nasdaq exchange on Friday on news of the deal.
PhotoMedex said it plans to leave its own headquarters at its current location, Horsham, Pennsylvania, while LCA-Vision’s headquarters and its call center would remain in Cincinnati.
PhotoMedex, which is trading at a market cap of about $276 million, predicts the deal will provide the company savings of $5 million by the end of this year.
The company is to finance the acquisition – assuming it goes forward – through a $75 million four-year loan.
LCA owns 47 vision correction and laser surgery centers and leases another five centers around the United States. It also has 10 facilities for treatment before and after eye surgery. It performs 54,000 surgical operations a year.
PhotoMedex CEO Dolev Rafaeli said LasikPlus’ business model is similar to that of his own company, in that both invest about 25% of their revenues in advertising.
Rafaeli said there were major synergies between the two firms.
LCA has been suffering from low profitability with cumulative earnings before deduction of interest, tax and amortization (EBITDA) of $600,000 on revenues of $92 million in the 12 months ending in September 2013.