22 Nov 2012
US firm specializing in laser and light-based systems for aesthetic applications may use additional cash to fund future acquisitions.
Cynosure, the Massachusetts company that develops laser systems for hair removal, treatment of nail fungus and cellulite reduction, has raised $55.3 million in a public offering of its stock.
The firm - part-owned by the Italian laser systems company El.en - sold 3.68 million class A common shares in deal underwritten by Leerink Swann, and says that the additional cash could be used to fund further consolidation in the aesthetic laser sector.
With nearly $88 million in cash and equivalents already on its balance sheet as of September 30, and having generated a net income of nearly $7 million so far this year, it does not appear that Cynosure is in any desperate need for the additional funds – suggesting that a significant investment, perhaps an acquisition, could be on the cards.
In the company’s latest financial results, CEO Micahel Davin highlighted two significant developments for 2013 that may use up some of the additional cash, saying: “We expect that Unilever will launch the first home-use aesthetic device under our multi-year development agreement, and we plan to introduce our ‘Picosure’ laser system for the removal of tattoos and pigmented lesions, subject to receiving regulatory clearance to market our picosecond alexandrite laser.”
So far this year, Cynosure has seen good commercial results from the introduction of its “Cellulaze” system – a 1440 nm, 10 W Nd:YAG laser treatment for cellulite. The treatment involves firing the laser directly at adipose tissue (body fat) via an incision, with the laser energy delivered through a fiber-optic.
That helped drive laser product revenues to $31 million in the quarter that ended September 30, up 37% on a year-over-year basis and accounting for 84% of the company’s total sales for the period.
"We have been pleased by the extent to which customers who previously purchased our [earlier] systems are upgrading those systems to the Cellulaze system,” Davin commented. “We are also pleased with the uptake of Cellulaze systems by aesthetic plastic surgeons who are first-time Cynosure customers.”
The CEO also noted strong demand for its “SmartLipo Triplex” laser liposuction systems, which use up to 40 W of Nd:YAG laser power at three different wavelengths - 1064 nm, 1440 nm and 1320 nm, and the “PinPointe” Nd:YAG system for treating nail fungus.
Whether or not Cynosure has specific acquisition targets in its sights remains to be seen, but the company does have previous form for such moves.
Last year, it took a consolidatory step in the laser aesthetic sector with the $24.5 million cash acquisition of HOYA Corporation's ConBio subsidiary. That deal gave Cynosure a stronger presence in Asia and access to a Q-switched Nd:YAG technology.