December 4, 2006, Mountain View, CA--Iridex has signed a definitive agreement with American Medical Systems Holdings to acquire the laser aesthetics business of medical-laser systems manufacturer Laserscope. American Medical purchased Laserscope in June of this year.
Under terms of the agreement, Iridex Corporation will acquire certain assets and liabilities of Laserscope, including four patents, a license to an additional nine Laserscope patents, and a license under the Palomar hair-removal patents for approximately $26 million in cash and $2 million in unregistered shares of Iridex common stock. In addition, at the close of the transaction, Iridex will acquire between $7.3 million and $9.5 million in net assets, including accounts receivable from Laserscope.
"We believe this acquisition will provide significant growth opportunities for our dermatology business and allow us to become one of the key players in the estimated $750 million global aesthetics laser market, as well as provide a platform for continued growth in ophthalmology," said Barry Caldwell, president and CEO of Iridex.
Laserscope's aesthetics business generated $37.8 million in 2004 and $36.9 million in 2005, Caldwell added. The company expects to integrate Laserscope's manufacturing requirements into our Mountain View facility, which currently has unused additional capacity, thus increasing production yields and enhancing gross margins for both its ophthalmology and dermatology businesses.
Laserscope is best known for its GreenLight laser systems, which are market leaders in the treatment of benign prostatic hyperplasia; in fact, the company's position in the urology market was what prompted American Medical's purchase of the company earlier this year. The aesthetics business of Laserscope develops light-based systems for non-surgical aesthetic procedures, focusing primarily on cosmetic treatments of dermatology-related conditions. Its Gemini laser systems perform a variety of aesthetic treatments, including removal of vascular lesions, red veins on the legs and face, port wine stains and pigmented lesions, wrinkles, leg veins, hair removal, enhanced skin rejuvenation and skin resurfacing.
Since its founding in 1982, Laserscope's aesthetics business has sold approximately 2,100 laser systems in the United States and 500 internationally. Combining this with the more than 1000 Iridex dermatology lasers in the field, Iridex's installed base will exceed 3600 laser systems.