Israeli medical esthetics and surgical company Lumenis has begun layoffs and restructuring ahead of the company's sale to Baring Private Equity Asia (BPEA). Sources inform "Globes" that a number development team staff, including people in senior positions, have already been laid off, in addition to production workers. The company has canceled two esthetics projects that were in the development stage.
Lumenis said in response, "The company is not halting or reducing or transferring its operations from Israel but enlarging them. The company from time to time adapts the mix of its operations and accordingly some personnel changes are required. The company is continuing to make major efforts to hire employees in Israel according to the capabilities that are required."
A month ago, Lumenis controlling shareholder XIO Group announced its intention to sell the company to BPEA at a company valuation of over $1 billion. XIO acquired Lumenis in 2015 at a valuation of $520 million. Lumenis was then listed on Nasdaq, and its leading shareholders were Viola Ventures and the Ofer Brothers Group. The announced intention of XIO, a European fund with roots in Asia, was to sell the company at twice the valuation at which it was acquired, and XIO appears to have accomplished just that.
Lumenis, a veteran Israeli company, develops and markets light energy-based devices for medical treatment. The company has three divisions: esthetic treatments (in which its first products were hair removal with lasers); ophthalmological surgery; and other laser surgery. The company is managed by CEO Tzipi Ozer-Armon.
BPEA, a private equity fund, was founded in 1997 in Asia. It still focuses on Asia, which is probably one of the reasons for its interest in Lumenis, a company with a strong presence in Asian markets, in addition to the US, Europe, and Latin America. BPEA's private equity activity is spread over many spheres, including health. Since it was founded, BPEA's acquisitions have totaled over $12 billion.
Lumenis's revenue totaled $400 million in 2018, the last time that the company officially published its revenue.
Lumenis began by using laser technology as a surgical tool, and was one of the pioneers in using laser technology in esthetic medicine in the 1990s, when it was known as ESC. In 1996, it was one of the first Israeli medical devices companies to hold a Nasdaq IPO, where it underwent a crisis, including a hostile takeover and dismissal of its founder and CEO, Dr. Eckhouse, from the company. In response, Eckhouse founded Syneron, which later competed directly with Lumenis.
Lumenis encountered difficulties early in the first decade of the 21st century. Its revenue was stable, but its profit margins declined. The company market cap fell, and it was acquired on the stock exchange by Ofer Brothers and Viola in 2006 for $120 million. Its profits at the time were only $2 million a year, and it had debt, assumed by the funds that acquired it.
Following an improvement in the company's business, first under the management of Dov Ofer and later under Ozer-Armon and chairman Harel Beit-On, the company held a $470 million offering in 2014, and was listed on the stock exchange for one year, before being acquired by XIO.
Published by Globes, Israel business news - en.globes.co.il - on December 17, 2019
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