Attached files
| file | filename |
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| EX-2.1 - EX-2.1 - CYNOSURE INC | d503688dex21.htm |
| EX-10.3 - EX-10.3 - CYNOSURE INC | d503688dex103.htm |
| EX-99.1 - EX-99.1 - CYNOSURE INC | d503688dex991.htm |
| EX-99.3 - EX-99.3 - CYNOSURE INC | d503688dex993.htm |
| 8-K - FORM 8-K - CYNOSURE INC | d503688d8k.htm |
Exhibit 99.2
Cynosure Signs Definitive Agreement to Acquire Palomar Medical Technologies
March 18, 2013
Forward-Looking Statements
With the exception of the historical information contained in this presentation, the matters described herein contain forward-looking statements, including, but not limited to, statements relating to long-term growth and profitability, projected synergies, the expectation of an accretive transaction in calendar 2014, the tax-free nature of the transaction and the timing of the closing of the transaction. These forward-looking statements are neither promises nor guarantees, but involve risk and uncertainties that may individually or mutually impact the matters herein, and cause actual results, events and performance to differ materially from such forward-looking statements. These risk factors include, but are not limited to, results of future operations, difficulties or delays in developing or introducing new products and keeping them on the market, the results of future research, lack of product demand and market acceptance for current and future products, adverse events, product changes, the effect of economic conditions, challenges in managing joint ventures and research with third parties, the impact of competitive products and pricing, governmental regulations with respect to medical devices, including whether FDA clearance will be obtained for future products and additional applications, the results of litigation, difficulties in collecting royalties, potential infringement of third-party intellectual property rights, factors affecting future income and resulting ability to utilize Cynosure’s NOLs, difficulties in combining the operations of Cynosure and Palomar, failure to receive approval from the stockholders of Palomar or Cynosure, failure to receive regulatory approvals for the merger, and/or other factors, which are detailed from time to time in Cynosure’s and Palomar’s SEC reports, including their reports on Form 10-K for the year ended December 31, 2012 and their quarterly reports on Form 10-Q. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.
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Additional Information About the Transaction
In connection with the proposed transaction, Cynosure intends to file with the Securities and Exchange Commission (SEC) a Registration Statement on Form S-4 that will include a joint proxy statement of Cynosure and Palomar that also constitutes a prospectus of Cynosure. Palomar and Cynosure also plan to file other relevant documents with the SEC regarding the proposed transaction. INVESTORS ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You may obtain a free copy of the joint proxy statement/prospectus (if and when it becomes available) and other relevant documents filed by Cynosure and Palomar with the SEC at the SEC’s website at www.sec.gov You may also obtain these documents by contacting Cynosure’s Investor Relations Department at (617) 542-5300 or CYNO@investorrelations.com, or by contacting Palomar’s Investor Relations Department at (781) 993-2411 or ir@palomarmedical.com.
Cynosure and Palomar and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about Cynosure’s directors and executive officers is available in Cynosure’s proxy statement dated March 30, 2012 for its 2012 Annual Meeting of Stockholders and its Current Report on Form 8-K dated November 21, 2012. As of March 15, 2013, Cynosure’s directors and executive officers beneficially owned approximately 2.86 million shares, or 17.7%, of Cynosure’s common stock. Information about Palomar’s directors and executive officers is available in Palomar’s proxy statement dated April 4, 2012 for its 2012 Annual Meeting of Stockholders. As of March 15, 2013, Palomar’s directors and executive officers beneficially owned approximately 2.7 million shares, or 13.6%, of Palomar’s common stock. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the merger when they become available. Investors should read the joint proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from Cynosure or Palomar using the sources indicated above.
This presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
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Today’s Presenters
Michael Davin Chairman, President and CEO Cynosure
Joseph Caruso Chairman, President and CEO Palomar
Tim Baker Executive Vice President, and CFO Cynosure
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Transaction Overview
Cynosure to acquire Palomar for $13.65 per share, $294 million
50% cash / 50% stock, subject to collar (fixed exchange within collar) and potential cash true-up
Purchase consideration consists of 5.2 million shares and $147 million cash
Represents an attractive premium to market for Palomar shareholders
23% premium to Palomar’s average closing stock price since Q4 ‘12 earnings release
Approximately 34% premium to Palomar’s average enterprise value (net of cash) since Q4 ‘12 earnings release
New Management / Board
CEO and Chairman Michael Davin
President and Vice Chairman Joe Caruso
COO and CFO Tim Baker
Pro Forma Ownership: Cynosure (77%) / Palomar (23%)
Expected to close in the third quarter of 2013
Expected to be accretive to Cynosure in calendar 2014 with $8 million to $10 million in projected synergies
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Transaction Rationale
For Cynosure’s shareholders:
Complements product portfolio and customer base
Provides new organic product and service revenues
Strengthens global distribution network
Opens new cross-selling opportunities
Enhances intellectual property position
Creates substantial cost synergies
For Palomar’s shareholders:
Attractive acquisition premium
Ownership in world’s premier aesthetic laser company
Participation in future growth opportunities
Broadens market reach of Palomar’s products and technologies
Opens new cross-selling opportunities
Industry’s broadest aesthetic laser capabilities and most comprehensive product portfolio
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Combination Creates Market Leader
Both companies share a 20+ year heritage
Installed base of more than 20,000 systems
Portfolio spans laser and light-based energy sources
More than 80 patents
Global distribution network
Sales in more than 100 countries
Direct operations in nine countries
Diversified geographic mix
Attractive financial portfolio
Pro-forma 2012 revenue of $234 million
2012 revenue growth: Cynosure (+39%), Palomar professional revenue growth (+16 %, excluding royalties and other revenues)
GAAP profitability
Strong balance sheet: pro forma for the transaction $87 million net cash(1)
(1) Includes proceeds from in-the-money Palomar options assumed to be exercised and impact of change-of-control agreements and transaction costs.
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Cynosure and Palomar Have Defined The Industry
The use of aesthetic lasers today has expanded by the innovation and execution of new applications of light based technologies.
Cynosure created new markets by introducing
The first minimally invasive laser lipolysis technology
The first minimally invasive cellulite reduction technology
The first picosecond technology for tattoo removal
Palomar created new markets by introducing
The first laser hair removal system
The first fractional technology
(1) Includes proceeds from in-the-money Palomar options assumed to be exercised and impact of change-of-control agreements and transaction costs.
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Significant Market Opportunities
Sales of Light-Based Device Worldwide Procedure Volume for Platforms By Application Light-Based Aesthetic Treatments
($ in millions) (in millions)
Source: Medical Insight, Inc.
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Complementary Aesthetic Franchises
Broad laser portfolio Intense pulsed light (IPL) heritage
Differentiated minimally invasive Advanced diode technology portfolio (Cellulaze, SmartLipo)
Fractional lasers / entry into low
Picosecond technology platform price segment (PicoSure)
Onychomycosis product
2012 Revenue: Publicly Traded Companies
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Worldwide Distribution
2012 Pro Forma Professional Product Revenue
52%
North RoW
RoWAmerica 48%
48% 52%
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Key Strengths of Combined Company
1 Hair removal franchise covering all three key modalities
2 Intense pulsed light (IPL) with emphasis on skin rejuvenation
3 Minimally invasive technologies
Cellulite reduction, Laser lipolysis and Body shaping
4 Innovative PicoSure picosecond multi-application laser platform
5 Low-cost non-ablative fractional laser
6 Advanced diode technology capabilities
7 Intelligent delivery systems
8 Home-use consumer market initiative
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1 Case Study: Hair Removal
Launched in September 2012
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1 Vectus Diode Hair Removal Laser
Launched in September 2012
State of the art Graphic User Interface
Skintel melanin optical density system to enhance efficacy and safety
Advanced contact cooling for increased client comfort
High peak power
Short-pulse capability
Uniform beams without “hot spots” for greater comfort
Interchangeable spot sizes
Large spot size option for fast coverage
Small spot size option for precise treatments
Photon Recycling for maximum treatment results
Fastest system on the market
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2 A Leader in Intense Pulsed Light (IPL)
Legacy laser and IPL platform
Factory refurbished systems to address the lower priced market
Sold to certain countries until Icon receives registration
Replacement handpiece business provides an ongoing revenue stream
Next generation IPL + solid state laser platform
Launched Q2 2011
Interchangeable handpieces
Multiple applications
High peak powers for vessels
High average powers for hair
Non ablative and ablative skin resurfacing
Advanced cooling
Treatment tracking software
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3 Leadership in Minimally Invasive Solutions
Laser lipolysis for removal of unwanted fat
First launched in 2006
Current 3rd generation SmartLipo TriPlex launched in Q4 2009
Long-lasting reduction of cellulite
US: Q1 2012 510(k) / Launch
Europe: 2011 CE Mark / Launch
Cellulite affects an estimated 85% of women over age 20
Intelligent energy delivery and disposable fibers
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3 Leadership in Minimally Invasive Solutions
Laser-assisted lipolysis system
SlimLipo : Selective Laser Induced Melting Procedure
Addresses fastest growing segment of the cosmetic light-based market
Single use proprietary fiber tip with interchangeable tip designs for specific treatment areas
Fat transfer system
Unique filtering mechanism and optimized centrifugation to yield a higher quality of adipose tissue for reinjection
Higher graft volume survival and more predictable outcomes with less need to overfill
High margin disposable
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4 Picosecond Technology Platform
Launched at AAD Annual Meeting (March 1, 2013)
Initial focus: Removal of tattoos and benign pigmented lesions
Future: Other aesthetic applications
Picosecond laser expected advantages:
Preserves skin integrity while achieving clear resolution of ink
Delivers photothermal and significant photomechanical effects
100x shorter pulse than current technology
Under development for ~10 years
Before
3 Month Post 4 Tx
An estimated 20% of the 45 million Americans with at least one tattoo want to have it removed
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4 Differentiated Tattoo Removal
*Company estimates based on industry publications.
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5 Emerge Fractional Laser
Easy to use
Portable
Small footprint
Low cost non-ablative fractional laser
High ROI
Complements Botox and fillers to build an aesthetic practice
Pay per procedure
Additional applications under development
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6 Advanced Diode Technology
Under development for ~10 years
High powered diode lasers
Semiconductor material; Similar to computer chips producing very high intense light vs. electrical signals
Key attributes:
Very efficient energy source
Up to 70% efficient converting electrical power to light as compared to only a few percent efficiency for other lasers
Reliable
Ability to operate for thousands of hours or up to 10 times longer than other lasers without service
Low Cost
More powerful devices than competitors at the same price point
Size
Compact portable products that have a relatively small footprint
Speed
High average power means more shorter treatment times and profitable for physician
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6 Advanced Diode Products
Vectus
High-powered diode hair removal system
Emerge
Non-ablative fractional laser
SlimLipo
Non-invasive laser lipolysis system
PaloVia
Home use skin rejuvenation laser
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7 Intelligent Delivery Systems
Skintel Melanin • For use with Icon and Vectus Optical Density Reader
The only FDA-cleared melanin reader for use with light-based treatments
Enables treatment outcomes to be consistent and predictable to a level previously not attained
Accurately measures the melanin levels in skin
Wirelessly sets suggested treatment parameters for the best and safest clinical outcome
Provides additional safety and efficacy
Intelligent motion and temperature monitoring
Side-firing laser allows greater physician control
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8 Home Use Initiative
Aesthetic market leader
Leadership through innovation Harmonious vision and mission Financial strength
Cynosure’s first home-use over the counter device for the treatment of facial wrinkles Received 510(k) clearance in July 2012 Expected to be launched commercially by Unilever in 2013
The first FDA cleared at-home laser clinically proven to reduce fine lines and wrinkles around the eyes
Provides a low cost platform for additional consumer applications
Low cost diode technology that can be leveraged in the professional market
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Historical Revenues
Palomar
($ in millions)
Cynosure
$153.5
($ in millions)
Excludes $29.8MM in royalty revenues from settlement of Candela/Syneron litigation
Product Revenue CAGR: 13.1%
Product Revenue CAGR: 27.2%
Pro Forma Revenue
Combined revenue information as of 12/31/2012
Total revenue $234MM
Product revenue $184MM
($ in millions)
(Totals may not add due to rounding)
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Acquisition Synergies
Expected cost synergies
Public company expenses
Board of directors
Administrative $8MM to $10MM in Facility synergies
Management Marketing
International distribution
Includes transaction costs, change-of-control costs and anticipated exercise of in-the-money Palomar options
Acquisition expected to be accretive to Cynosure in 2014
Post transaction (pro forma)
Shares outstanding: 22MM Cash balance: $87MM*
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Combined Company Headquarters
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Cynosure’s Successful History of Integration
Track record of successful business development
Acquisitions in 2011:
Eleme Medical (2/11): SmoothShapes
ConBio (6/11): RevLite and MedLite C Series
Exclusive worldwide distribution rights for PinPointe Foot Laser
Opportunistically will continue to evaluate strategic transactions
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Summary
Combination of Cynosure and Palomar creates premier global aesthetic laser and light-based company
Comprehensive product/technology portfolio
Seasoned management team
Valuable intellectual property portfolio
Direct operations in nine countries
Best-in-class, worldwide network of international distributors
Strong balance sheet
Momentum with recent and pending product launches
PicoSure and Cellulaze
Vectus, ICON and Emerge
Home-use product in partnership with Unilever
Ample bandwidth for additional growth
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Cynosure Signs Definitive Agreement to Acquire Palomar Medical Technologies
March 18, 2013