UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported): February 23,
2010
STAAR Surgical
Company
(Exact
name of registrant as specified in its charter)
|
Delaware
(State
or other jurisdiction
of
incorporation)
|
0-11634
(Commission
File Number)
|
95-3797439
(I.R.S.
Employer
Identification
No.)
|
|
1911
Walker Ave, Monrovia, California
(Address
of principal executive offices)
|
91016
(Zip
Code)
|
Registrant’s
telephone number, including area code: 626-303-7902
Not
Applicable
Former
name or former address, if changed since last report
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ] Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
[ ] Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 – Entry into a Material Agreement
Divestiture
of Domilens GmbH
On
February 23, 2010, the Company entered into an agreement to divest all of its
interest in its German distribution subsidiary, Domilens GmbH (“Domilens”)
through a management buyout led by funds managed by Hamburg-based Small Cap
Buyout Specialist BPE Unternehmensbeteiligungen GmbH (“BPE”). To
effectuate the transaction STAAR Surgical AG (“STAAR AG”), STAAR’s Swiss
subsidiary and holder of 100% of the shares of Domilens, signed a Stock Purchase
Agreement (the “Agreement”) with Domilens Akquisitions GmbH (“Domilens
Acquisitions”). Domilens Akquisitions is a newly formed entity 74%
owned by BPE and 26% owned by senior management of Domilens. The
transaction closed on March 2, 2010.
The
Agreement provides for a Purchase Price of €10,512,100 (approximately US$14.3
million at currently prevailing exchange rates of). After adjusting
for €800,000 in cash dividends received by the Company from Domilens in December
2009 and January 2010, and the exclusion of expenses related to compliance with
the Sarbanes-Oxley Act of 2002, Domilens Akquisitions paid a cash Net Purchase
Price of €9,685,700 (approximately US$13.2 million at currently prevailing
exchange rates). €100,000 of the Net Purchase Price was paid into an
escrow account, to be held against payment of any unaccrued taxes assessed for
periods ending December 31, 2009. Funds remaining after the
resolution of such liabilities will be distributed to the Company no later than
December 31, 2011.
Based on
the performance of Domilens in fiscal years 2010, 2011 and 2012, the Company may
earn up to an additional €675,000 (approximately $920,000 at currently
prevailing exchange rates). These additional “earn-out” payments will
be paid on achievement of specified earnings before income tax (“EBIT”) as set
forth below. If a target is missed in any year, but in the following
year Domilens achieves the target and also makes up for the earlier shortfall, the
payments for both years will be earned and paid.
|
Fiscal
Year
|
Domilens
EBIT
|
Earn-Out
Payment
|
|
2010
|
€2,500,000
|
€200,000
|
|
2011
|
€2,900,000
|
€225,000
|
|
2012
|
€3,500,000
|
€250,000
|
After
expenses, and excluding the escrowed funds and any earn-out payments, the
Company expects to receive net cash proceeds of approximately €9,399,000 from
the transaction (approximately US$12.8 million at currently prevailing exchange
rates).
In
connection with the Stock Purchase Agreement, the Company has entered into a
Distribution Agreement with Domilens providing for the continued sale of the
Company’s products following the transfer of ownership. The
Distribution Agreement has a term of five years. During the first
three years of the term Domilens will be the exclusive distributor of covered
products in Germany and Austria, subject to Domilens achieving minimum purchase
levels. After the initial three-year period Domilens will have
non-exclusive distribution rights for these STAAR products, unless the parties
agree to an extension of the exclusivity. The following products are covered by
the Distribution Agreement: preloaded silicone and acrylic IOL
injectors; the Visian ICL, Visian Toric ICL and Visian Hyperopic
ICL.
Forward-Looking
Statements
Any
statements in this report that are not historical in nature are forward-looking
statements, including statements regarding any future payment that may be
received by the Company as a result of the earn-out provisions or the escrow
account provided for in the Stock Purchase Agreement. The earn-out
payments will be earned only if Domilens significantly improves its performance
over levels it has historically been able to achieve. Domilens may not be able
to achieve these improvements. The escrow account will be used to pay
any additional unaccrued taxes that the German tax authorities may assess after
their next audit, which the Company cannot predict and may leave little or no
funds in the escrow account remaining for distribution to the
Company.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
March
2, 2010
|
STAAR
Surgical Company
By: /s/
Barry G.
Caldwell
Barry
G. Caldwell
President
and Chief Executive Officer
|