Lumenis $1b sale to CVC still on hold

Tzipi Ozer-Armon CEO Lumenis Photo; Eyal Izhar

The veteran Israeli company, which develops and markets medical devices based on laser treatment, still remains under the ownership of XIO Group.

Despite media reports last November that Israeli medical device company Lumenis was about to be sold to UK private equity fund CVC Capital Partners for nearly $1 billion, sources inform "Globes," that the deal has not moved ahead. Lumenis is still fully owned by UK fund XIO Group, which acquired it in 2015 for $520 million from the stock exchange and controlling shareholders Viola Ventures and Ofer Brothers.

Lumenis, a veteran Israeli company, develops and markets medical devices based on laser treatment. The company has three divisions: esthetic treatment (its first products in this sector were in laser hair removal), ophthalmologic laser surgery, and other laser surgery. The company is managed by CEO Tzipi Ozer-Armon.

Following the company's sale to XIO, Ozer-Armon told "Globes" that when a concern like XIO invests in an Israel company, "They want to at least double their investment." It appears, however, that this deal, if it happens, will take longer than expected. According to its recent reports, Lumenis had $400 million in revenue. Its products are marketed worldwide, with success in China, among other markets.

Lumenis has several hundred employees in Yokne'am. They threatened sanctions after headlines appeared in the media about the company's sale to CVC because they had not been involved in the process, but it now seems that their anger was pointless.

Lumenis began with the use of lasers as a surgical tool, and was one of the pioneers in medical esthetic laser surgery in the 1990s. The company was called ESC at the time. In 1996, it became one of the first Israeli medical device companies to hold a Nasdaq IPO. The company underwent a crisis that included a hostile takeover and the ouster of founder and CEO Dr. Shimon Eckhouse, who founded Synernon in response. Synernon later competed directly with Lumenis.

The company encountered difficulties after 2000. Its revenue was stable, but its profits were affected. The company's market cap declined, and it was acquired from the stock exchange in 2006 by Ofer Brothers and Viola for $120 million. The company's annual profit at the time was only $2 million and it had a debt, which the funds that acquired it assumed.

Following improvement in the company's operations, first under the management of Dov Ofer and later Ozer-Armon as CEO and Harel Beit-On as chairperson, the company held an IPO in 2014 at a company value of $470 million. It was listed for one year, before being acquired by XIO.

Published by Globes, Israel business news - en.globes.co.il - on March 31, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Tzipi Ozer-Armon CEO Lumenis Photo; Eyal Izhar
Tzipi Ozer-Armon CEO Lumenis Photo; Eyal Izhar
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