PhotoMedex, which is engaged in the development, manufacturing and marketing of medical laser products and services, has completed the acquisition of Photo Therapeutics, a developer and provider of non-laser light devices and associated skin care products for the treatment of clinical and aesthetic dermatological conditions.
Under the terms of the agreement the initial purchase price of $13m was paid at closing, and up to an additional $7m of consideration will be paid to the sellers if certain gross profit milestones are met by Photo Therapeutics between July 1, 2008 and June 30, 2009, subject to customary adjustments.
The acquisition was funded through a convertible debt investment of $18m by an investment fund managed by Perseus, which financed the $13m purchase price of the acquisition, and a further $5m in working capital at the closing of the acquisition.
Under the terms of Perseus’s investment, Perseus will make up to an additional $7m convertible debt investment in PhotoMedex in the event the additional consideration is payable under the terms of the Photo Therapeutics acquisition. After the payment of approximately $2m of transaction expenses associated with the acquisition and Perseus investment, the company will have approximately $3m remaining for use as working capital.
Jeff O’Donnell, president and CEO of PhotoMedex, said: We are very excited about completing this acquisition which further solidifies our dermatological franchise. In addition, we are very encouraged with the future growth prospects of Photo Therapeutics’s products. We believe having Perseus’s support as our financial partner will allow us to focus on continuing to build market share in both the medical and consumer dermatology space.