Israeli esthetic medical company Lumenis, controlled by foreign private equity fund XIO, is changing hands again. Control of Lumenis will be sold to Baring Private Equity Asia (BPEA) at a valuation of over $1 billion.
XIO acquired Lumenis in 2015 at a valuation of $520 million. Lumenis was then listed on Nasdaq, and its leading shareholders were Viola Ventures and the Ofer Brothers Group. The announced intention of XIO, a European fund with roots in Asia, was to sell the company at twice the valuation at which it was acquired, and XIO appears to have accomplished just that.
Lumenis, a veteran Israeli company, develops and markets light energy-based devices for medical treatment. The company has three divisions: esthetic treatments (in which its first products were hair removal with lasers); ophthalmological surgery; and other laser surgery. The company is managed by CEO Tzipi Ozer-Armon.
BPEA was founded in 1997. It still focuses on Asia, which is probably one of the reasons for its interest in Lumenis, a company with a strong presence in Asian markets, in addition to the US, Europe, and Latin America. BPEA’s private equity activity is spread over many spheres, including health. Since it was founded, BPEA’s acquisitions have totaled over $12 billion.
$400 million revenue in 2018
Lumenis’s revenue totaled $400 million in 2018, the last time that the company officially published its revenue.
Lumenis began by using laser technology as a surgical tool, and was one of the pioneers in using laser technology in esthetic medicine in the 1990s, when it was known as ESC. In 1996, it was one of the first Israeli medical devices companies to hold a Nasdaq IPO, where it underwent a crisis, including a hostile takeover and dismissal of its founder and CEO, Dr. Eckhouse, from the company. In response, Eckhouse founded Syneron, which later competed directly with Lumenis.
Lumenis encountered difficulties early in the first decade of the 21st century. Its revenue was stable, but its profit margins declined. The company market cap fell, and it was acquired on the stock exchange by Ofer Brothers and Viola in 2006 for $120 million. Its profits at the time were only $2 million a year, and it had debt, assumed by the funds that acquired it.
Following an improvement in the company’s business, first under the management of Dov Ofer and later under Ozer-Armon and chairman Harel Beit-On, the company held a $470 million offering in 2014, and was listed on the stock exchange for one year, before being acquired by XIO.
“BPEA’s investment is a tremendous vote of confidence in Lumenis and in the achievements of our entire global organization,” Ozer-Armon said. ” In recent years, we have developed and introduced multiple groundbreaking technological solutions that have redefined our industry and opened entirely new market segments.”
BPEA managing director Yan Jiao added, “Lumenis has built a market-leading position by creating some of the most innovative technologies in the industry. It is a clear leader worldwide, especially in Asia which recently emerged as the largest market for medical and aesthetics treatments.” The deal, which is contingent on regulatory approvals, is slated for final approval a few months from now.
Published by Globes, Israel business news – en.globes.co.il – on November 19, 2019
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