2013 Medtech M&A Review: 3 Aesthetic-Focused Transactions

Cynosure, Apollo Endosurgery, and Fosun International made buys in the aesthetic space.

By Clyde A. Burkhardt

Cynosure Inc., a leader in laser and light-based treatment for both minimally invasive and noninvasive aesthetic procedures, acquired competitor Palomar Medical Technologies for approximately $287 million ($146 million in cash and the remainder in common stock). The combination of the two companies created the world’s largest laser and light-based treatment products company. The two companies’ products are used by plastic surgeons and other medical professionals for treatments including hair, scar, and tattoo removal; skin rejuvenation; and cellulite and fat removal.

Another aesthetic-oriented transaction was private-equity-owned Apollo Endosurgery’s acquisition of the obesity unit of Allergan. The key products of the unit are LAP-Band, an adjustable gastric band; a minimally invasive surgical laparoscopic weight loss device with FDA approval and broad-based insurance coverage; and ORBERA, a nonsurgical treatment for overweight and obese patients approved for sale in more than 40 countries outside the United States. Apollo Endosurgery acquired the unit for $110 million ($75 million in case, a minority equity interest valued at $15 million for Allergan, and an additional $20 million upon achievement of certain regulatory and revenue milestones). Interestingly, Apollo Endosurgery was cofounded with the Apollo Group, a collaboration of doctors from serveral major hospitals, including the Mayo Clinic, Johns Hopkins University, and Chinese University in Hong Kong. The collaboration resulted in a broad portfolio of patents in endoscopic surgery that became the foundation of the company.

A cross-border aesthetic transaction was the acquisition of Alma Lasers, an Israeli-based provider of laser, light-based, radio-frequency, and ultrasound devices for aesthetic and medical applications, by Fosun International, one of the largest privately held companies in China, with total asset over $25 billion on Forbes’ Global 2000 list of companies.

Clyde A. Burkhardt is senior managing director of HT Capital Advisors LLC (New York City), a private investment banking firm. He leads HT Capital Advisors' groups focusing on the medical device, healthcare services, and precision component industries. Contact Burkhardt at [email protected].