MARLBOROUGH, Mass. and
WESTFORD, Mass., Feb. 14, 2017 /PRNewswire/ -- Hologic, Inc.
(Nasdaq: HOLX), a leader in women's health, and Cynosure, Inc.
(Nasdaq: CYNO), a leader in medical aesthetics systems and
technologies, announced today they have signed a definitive
agreement for Hologic to acquire all outstanding Cynosure shares
for $66.00 per share in cash, which
corresponds to an equity value of approximately $1.65 billion and an enterprise value of
$1.44 billion net of cash.
The transaction, which has been approved unanimously by the
boards of directors of both companies, would extend Hologic's
scientific and commercial capabilities into one of the
fastest-growing segments in medical technology, while expanding
Cynosure's customer reach and addressable market.
"Acquiring Cynosure will accelerate our transformation into a
higher-growth company by leveraging our core women's health
expertise and OB/GYN channel leadership into an adjacent, cash-pay
segment that is expanding at a low double-digit rate," said
Steve MacMillan, Hologic's Chairman,
President and Chief Executive Officer (CEO). "We had
identified medical aesthetics as an attractive and complementary
growth opportunity through our strategic planning process, and are
pleased to have agreed to acquire Cynosure, the best-in-class
company in the space. Together, we can strengthen our shared
focus on innovation, market-leading products with demonstrated
clinical benefits, and strong customer relationships. "
Cynosure has a broad portfolio of more than 20 products across
major categories including non-invasive body contouring, hair
removal, skin revitalization and women's health. Cynosure
sells its products through a combination of direct sales and
distributors in over 130 countries. The company has a history
of organic innovation, most recently with the introduction of
SculpSure®, the world's first FDA-cleared laser treatment for
non-invasive body contouring. Cynosure also markets MonaLisa
Touch®, a novel CO2 laser for women's health.
Cynosure, which reported revenues of $433.5
million in 2016, has posted 28 consecutive quarters of
year-over-year top-line growth.
"We are thrilled at the prospect of becoming part of Hologic
through a transaction that provides excellent value for all of our
stakeholders," said Michael Davin,
Cynosure's Chairman, President and CEO. "Strategically, this
deal enables Cynosure to further capitalize on growth opportunities
in the core and non-core aesthetic market, rapidly strengthens our
position in women's health – where Hologic has a leading commercial
presence – and accelerates our R&D initiatives."
Benefits of the Transaction
- Provides Hologic entry into large, fast-growing medical
aesthetics segment. The medical aesthetics segment exceeds
$2 billion globally and is expected
to grow at a low-double-digit rate over the next several years,
making it one of the fastest-growing segments in the medical
technology industry. Growth is being driven by physicians' desire
to increase their cash-based procedures, and by increasing interest
in aesthetics and lifestyle health from an aging population.
- Leading medical aesthetics platform complements Hologic's
strong position in the OB/GYN and women's health channels.
Cynosure has a broad product portfolio built from a legacy of
innovation, and has begun to capitalize on the fast-growing areas
of non-invasive fat body contouring and women's health.
Approximately 60 percent of Cynosure's business is derived from
physicians outside the traditional areas of plastic surgery and
dermatology, with a significant focus on the OB/GYN channel.
Cynosure's products provide a strong complement to Hologic's
leadership positions and existing products in this channel, and
together the companies can further capitalize on the trend toward
minimally and non-invasive surgical procedures.
- Accelerates top- and bottom-line growth rates. This
transaction, coupled with the recently completed blood screening
divestiture, continues Hologic's transformation into a higher
growth company. Hologic estimates that together, the transactions
will enable the Company to accelerate pro-forma revenue growth by
roughly 150 basis points, and increase non-GAAP earnings per share
(EPS) at a solid double-digit rate, over the next several
years.
- Delivers attractive financial benefits. The transaction
is expected to be fully funded with cash on hand, including
proceeds from the recently completed blood screening divestiture.
Hologic estimates the deal will provide a high-single-digit return
on invested capital (ROIC) by year five, exceeding the Company's
cost of capital. The transaction is expected to be dilutive to GAAP
earnings per share. On a non-GAAP basis, however, Hologic forecasts
the deal will be immediately accretive, adding approximately
$0.03 to $0.05 to the Company's
non-GAAP EPS in the balance of fiscal 2017, adding approximately
$0.13 to $0.15 in non-GAAP EPS in
fiscal 2018, and becoming increasingly accretive in fiscal 2019 and
beyond. Hologic expects to realize annualized cost synergies of
approximately $25 million by the
third year after the close.
Transaction Details and Advisers
Under the terms of the agreement, a subsidiary of Hologic will
commence a tender offer to purchase any and all of the outstanding
shares of Cynosure common stock for $66.00 per share in cash. The completion of
the tender offer is subject to customary terms and closing
conditions, including Cynosure stockholders tendering a majority of
Cynosure's outstanding shares, and receipt of specified regulatory
approvals. Following the successful completion of the tender
offer, the agreement provides that Cynosure will merge with a
subsidiary of Hologic and become a wholly-owned subsidiary of
Hologic, and all remaining outstanding shares of Cynosure will
receive the same consideration paid to other stockholders in the
tender offer. Following the completion of the transaction,
Cynosure shares will be delisted from NASDAQ. The tender
offer is expected to be completed in late March or April of 2017,
subject to the satisfaction or waiver of the offer conditions.
Morgan Stanley & Co. LLC is serving as financial adviser to
Hologic, and Wachtell, Lipton, Rosen & Katz is serving as legal
adviser.
Leerink Partners LLC is serving as financial adviser to
Cynosure, and Wilmer Cutler Pickering
Hale and Dorr LLP is serving as legal adviser.
Conference Call and Webcast
Hologic's management will host a conference call at 8:30 a.m. ET today to discuss this
transaction. Approximately 10 minutes before the call, dial
877-591-4951 (U.S. and Canada) or
719-325-4796 (international) and enter access code 473536. A
replay will be available starting two hours after the call ends
through March 9, 2017 at 888-203-1112
(U.S. and Canada) or 719-457-0820
(international), access code 473536, pin 9876. The Company
will also provide a live webcast of the call at
http://investors.hologic.com.
About Hologic, Inc.
Hologic, Inc. is a leading developer, manufacturer and supplier
of premium diagnostic products, medical imaging systems and
surgical products. The Company's core business units focus on
diagnostics, breast health, GYN surgical, and skeletal
health. With a unified suite of technologies and a robust
research and development program, Hologic is dedicated to The
Science of Sure. For more information on Hologic, visit
www.hologic.com.
Hologic and The Science of Sure are trademarks and/or registered
trademarks of Hologic, Inc. and/or its subsidiaries in the United States and/or other countries.
About Cynosure
Cynosure develops, manufactures and markets aesthetic treatment
systems that enable plastic surgeons, dermatologists and other
medical practitioners to perform non-invasive and minimally
invasive procedures to remove hair, treat vascular and benign
pigmented lesions, remove multi-colored tattoos, revitalize the
skin, reduce fat through laser lipolysis, reduce cellulite, clear
nails infected by toe fungus, ablate sweat glands and improve
women's health. The Company also markets radiofrequency (RF)
energy-sourced medical devices for precision surgical applications
such as facial plastic and general surgery, gynecology, ear, nose,
and throat procedures, ophthalmology, oral and maxillofacial
surgery, podiatry and proctology. Cynosure's product
portfolio is composed of a broad range of energy sources including
Alexandrite, diode, Nd: YAG, picosecond, pulse dye, Q-switched
lasers, intense pulsed light and RF technology. Cynosure
sells its products globally under the Cynosure, Palomar, ConBio and
Ellman brand names through a direct sales force in the United States, Canada, France, Morocco, Germany, Spain, the United
Kingdom, Australia,
China, Japan and Korea, and through international
distributors in approximately 120 other countries. For
corporate or product information, visit Cynosure's website at
www.cynosure.com.
Non-GAAP Financial Measures
This press release discusses non-GAAP diluted EPS, which is a
non-GAAP financial measure. Hologic defines its non-GAAP EPS
presented in this press release to exclude transaction costs, the
amortization of intangible assets and purchase accounting effects
related to recording inventory, fixed assets and deferred revenue
to fair value, among other items, as well as potential charges for
integration costs including retention, and the related income taxes
related to such adjustments.
Non-GAAP diluted EPS adjusts for specified items that may be
non-cash, or can be highly variable or difficult to predict.
In the context of forward-looking statements, the non-GAAP
financial measures facilitate period-to-period comparisons by
excluding the effects of events that have occurred in the past or
may occur in the future and have accounting consequences that can
mask underlying operational trends, such as acquisitions,
restructurings, debt extinguishment and impairments.
This non-GAAP financial measure should be considered
supplemental to, and not a substitute for, financial information
prepared in accordance with GAAP. Because non-GAAP financial
measures exclude the effect of items that will increase or decrease
the Company's reported results of operations, management encourages
investors to review the Company's consolidated financial statements
and publicly filed reports in their entirety.
Future GAAP EPS may be affected by changes in ongoing
assumptions and judgments, and may also be affected by
non-recurring, unusual or unanticipated charges, expenses or gains,
which are excluded in the calculation of the Company's non-GAAP EPS
forecast as described in this press release.
When Hologic provides its expectations for non-GAAP EPS on a
forward-looking basis, a reconciliation of the differences between
this non-GAAP expectation and the corresponding GAAP measure (GAAP
EPS) is not available without unreasonable effort because Hologic
has not estimated the fair value of the assets and liabilities
expected to be acquired in the transaction. Nor has the
Company determined the fair value of acquired intangible assets and
related annual amortization expense that would be required in order
to provide the corresponding GAAP measure. The variability of
the items that have not yet been determined may have a significant,
and potentially unpredictable, impact on Hologic's future GAAP
results.
Additional Information and Where to Find It
The tender offer for the outstanding shares of Cynosure
referenced in this document has not yet commenced. This
document is for informational purposes only and is neither an offer
to purchase nor a solicitation of an offer to sell shares, nor is
it a substitute for the tender offer materials that Hologic and its
subsidiary will file with the Securities and Exchange Commission
("SEC"). At the time the tender offer is commenced, Hologic
and its subsidiary will file tender offer materials on Schedule TO,
and thereafter Cynosure will file a Solicitation/Recommendation
Statement on Schedule 14D-9, with the SEC with respect to the
tender offer. THE TENDER OFFER MATERIALS (INCLUDING AN OFFER
TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER
TENDER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION
STATEMENT WILL CONTAIN IMPORTANT INFORMATION. HOLDERS OF
SHARES OF Cynosure COMMON STOCK ARE URGED TO READ THESE DOCUMENTS
CAREFULLY WHEN THEY BECOME AVAILABLE (AS EACH MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME) BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION THAT HOLDERS OF SHARES OF Cynosure COMMON STOCK SHOULD
CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR
SHARES. The Offer to Purchase, the related Letter of
Transmittal and certain other tender offer documents, as well as
the Solicitation/Recommendation Statement, will be made available
to all holders of shares of Cynosure common stock at no expense to
them. The tender offer materials and the
Solicitation/Recommendation Statement will be made available for
free at the SEC's website at www.sec.gov. Additional copies
of the tender offer materials may be obtained for free by
contacting Hologic, Inc. at 250 Campus Drive, Marlborough, MA 01752, Attention: Investor
Relations. In addition to the Offer to Purchase, the related
Letter of Transmittal and certain other tender offer documents, as
well as the Solicitation/Recommendation Statement, Hologic and
Cynosure file annual, quarterly and current reports and other
information with the SEC. You may read and copy any reports
or other information filed by Hologic or Cynosure at the SEC public
reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the
Commission at 1-800-SEC-0330 for further information on the public
reference room. Hologic's and Cynosure's filings with the SEC
are also available to the public from commercial document-retrieval
services and at the SEC's website at www.sec.gov.
Forward-Looking Statements
This news release contains forward-looking information that
involves risks and uncertainties, including statements about each
company's plans, objectives, expectations and intentions.
Such statements include, without limitation: financial or other
information based upon or otherwise incorporating judgments or
estimates relating to future performance, events or expectations;
each company's strategies, positioning, resources, capabilities,
and expectations for future performance; and each company's outlook
and financial and other guidance. Any statements that are not
statements of historical fact (including statements containing the
words "believes," "plans," "anticipates," "expects," estimates and
similar expressions) should also be considered to be
forward‑looking statements. These forward-looking statements are
based upon assumptions made as of this date and are subject to
known and unknown risks and uncertainties that could cause actual
results to differ materially from those anticipated.
Risks and uncertainties that could adversely affect the either
company's business and prospects, and otherwise cause actual
results to differ materially from those anticipated, include
without limitation: the possibility that the anticipated benefits
from the proposed transaction cannot be fully realized or may take
longer to realize than expected; the possibility that costs or
difficulties related to the integration of Cynosure's operations
with those of Hologic will be greater than expected; the ability of
the combined company to retain and hire key personnel; the ability
of the parties to timely and successfully receive required
regulatory approvals; the effect of the continuing worldwide
macroeconomic uncertainty, including the UK's decision to leave the
European Union, on each company's business and results of
operations; the coverage and reimbursement decisions of third-party
payors and the guidelines, recommendations, and studies published
by various organizations relating to the use of products and
treatments; the uncertainty of the impact of cost containment
efforts and federal healthcare reform legislation on each company's
business and results of operations; the impact to Hologic's results
of operations from the disposal of its blood screening business to
Grifols, and the operational challenges of separating this business
unit from Hologic's molecular diagnostics business; the ability to
successfully manage ongoing organizational and strategic changes,
including Hologic's ability to attract, motivate and retain key
employees; the impact and anticipated benefits of completed
acquisitions and acquisitions Hologic may complete in the future;
the ability to consolidate certain of Hologic's manufacturing and
other operations on a timely basis and within budget, without
disrupting Hologic's business and to achieve anticipated cost
synergies related to such actions; the development of new
competitive technologies and products; regulatory approvals and
clearances for products; production schedules for products; the
anticipated development of markets in which products are sold into
and the success of products in these markets; the anticipated
performance and benefits of products; business strategies;
estimated asset and liability values; the impact and costs and
expenses of any litigation the companies may be subject to now or
in the future; compliance with covenants contained in Hologic's
debt agreements; anticipated trends relating to Hologic's financial
condition or results of operations, including the impact of
interest rate and foreign currency exchange fluctuations; and
Hologic's capital resources and the adequacy thereof.
The risks included above are not exhaustive. Other factors
that could adversely affect each company's business and prospects
are described in the filings made by the applicable company with
the SEC. Hologic and Cynosure expressly disclaim any obligation or
undertaking to release publicly any updates or revisions to any
such statements presented herein to reflect any change in
expectations or any change in events, conditions or circumstances
on which any such statements are based.
Contact
Hologic
Michael Watts
Vice President, Investor Relations and Corporate Communications
(858) 410-8588
Cynosure
Scott Solomon
Senior Vice President
Sharon Merrill Associates
(617) 542-5300
CYNO@investorrelations.com
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SOURCE Hologic, Inc.