Citing Underperformance, Hologic Sells Cynosure Medical Aesthetics Business for $205M

The price is a tenth of the $1.6B that Hologic paid two years ago to acquire Cynosure.

Hologic is selling Cynosure medical aesthetics business to an affiliate of investment funds managed by Clayton, Dubilier & Rice for a total purchase price of $205 million in cash, subject to certain closing adjustments. This is a tenth of the $1.6B that Hologic, a women's health care company,  paid two years ago to acquire Cynosure.

Net of these adjustments, Hologic expects net cash proceeds of approximately $138 million, the company reports.

"Divesting our medical aesthetics business will enable us to focus on what we do best – helping women and their families live healthier lives through early detection of disease," says Steve MacMillan, the Company's Chairman, President and Chief Executive Officer., in a news release."Since we acquired Cynosure in 2017, it has significantly underperformed our expectations. We believe this transaction will unlock value for Hologic shareholders, and at the same time provide Cynosure and its employees the best opportunity to succeed in the medical aesthetics marketplace. Moving forward, our business development strategy remains focused on the smaller, tuck-in deals that have been performing well for us and strengthening our core franchises.”

Under the terms of the agreement, approximately 825 employees will transfer with the Cynosure business. The transaction is expected to close around the end of calendar 2019, subject to regulatory approvals and other customary conditions.

Goldman Sachs & Co. LLC is serving as financial adviser to Hologic, while Wachtell, Lipton, Rosen & Katz is acting as legal counsel. UBS has committed to provide debt financing as part of the transaction and is acting as financial advisor to Clayton, Dubilier & Rice. Barclays and Credit Suisse are also acting as financial advisors, and Debevoise & Plimpton LLP is acting as legal counsel to Clayton, Dubilier & Rice.