PhotoMedex and DS Healthcare Announce Deal

PhotoMedex, Inc. has entered into a definitive agreement to sell its consumer products and professional products businesses to DS Healthcare Group, a Pompano, FL-based developer of topical pharmaceutical and personal care products, for total consideration of approximately $48 million in a combination of convertible preferred stock, common stock and a note.
 
This proposed transaction, which is structured in two reverse triangular mergers, is subject to customary closing conditions, including PhotoMedex and DS Healthcare Group shareholders approvals and regulatory approvals. The boards of directors of both PhotoMedex and DS Healthcare Group have voted unanimously in favor of the transaction, which is expected to close in the second quarter of 2016.

Afer the deal closes, PhotoMedex shareholders will own approximately 43% of the company and DS Healthcare shareholders will own approximately 57%, each on an “as converted” basis.

“This agreement presents our shareholders with an opportunity to receive significant value for our operating assets, both immediately and over the coming three years,” said Dr. Dolev Rafaeli, chief executive officer of PhotoMedex. “In particular Radiancy’s home-use medical and personal care devices franchise and its unique marketing platform will gain an additional arsenal of complementary products for distribution alongside our portfolio of consumer brands. Also, our Neova professional skin care line will move seamlessly into DS Healthcare’s direct salesforce in Mexico, Spain and Colombia and distributors in Canada, Portugal, Italy, South Africa, China, and Brazil Our proprietary consumer marketing engine will be used to increase the sales growth of DS Healthcare Group’s disruptive products through DTC channels and a direct-marketing platform. The structure of this agreement permits our shareholders to participate in the growth anticipated by DS Healthcare in the near future while the talented PhotoMedex staff is expected to transition to the new owners. PhotoMedex intends to distribute the proceeds from this agreement, net of certain professional fees, severance, income taxes and other costs, to its shareholders in an orderly fashion over the next three years.”

“We are very excited to add these innovative devices that have absolutely no equivalent market competitor and a range of proprietary technologies to our growing portfolio of products. PhotoMedex has remarkable expertise in the development of personal medical devices and has many additional products in the pipeline, some of which have already received FDA clearance. In addition, the Neova professional skin care line adds valuable access to a global network of physicians. Through this transaction we will expand our professional aesthetic and therapeutic skin care portfolio in anti-aging skin care and specialty skin care products used post-hair transplantation, and add to our portfolio of at-home products for hair removal, acne treatment and back pain relief,” commented Daniel Khesin, chairman and founder of DS Healthcare Group. “Through this transaction we will have a truly global footprint and a massive marketing structure to unlock extraordinary synergies and opportunities for our shareholders.”

“DS Healthcare is uniquely positioned to immediately take advantage of Radiancy assets to extract substantial value for all shareholders,” stated Renee Barch-Niles, chief executive officer of DS Healthcare. “Our combined product development expertise, distribution relationships and industry-leading management team will allow us to scale this business to unlock tremendous appreciation to the company’s combined value.”