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Syneron IPO and Follow- On Offering Management Experience.

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Presentation on theme: "Syneron IPO and Follow- On Offering Management Experience."— Presentation transcript:

1 Syneron IPO and Follow- On Offering Management Experience

2 2 Syneron History in Brief 2000 – Inception, $ 1.3 M raised from founders. ELOS TM technology development 2001 – Launch Aurora TM, first European Regulatory approval 2002 – Start sales in Europe and Canada, establishment of North American sales and marketing, first FDA, launch of Aurora in North America Revenue of $ 12 M, net profit of $ 2.5 M 2003 – Expansion of marketing and sales network to establish global presence: NA, Europe and Asia; introduction of Polaris TM and Pitanga TM Revenue of $ 35 M, net profit of $ 15 M 2004 – Expansion of product portfolio, introduction of Galaxy TM, Vela TM and Comet TM ; Successful IPO Revenue of $ 58 M, net profit of $ 27 M 2005 – Successful follow-on offering Expected revenue of $ 80 M and net profit of $ 36 M

3 3 Syneron has demonstrated 13 consecutive quarters of growth… ($ in millions) = International Sales= North America Sales CQGR (Compounded Quarterly Growth Rate): 34% Follow On IPO

4 4 …And a Focus on Profitability ($ in millions) Note: Excludes charges related to Lumenis litigation Follow On IPO

5 5 Syneron has created value for Syneron shareholders… 300% growth in share price since IPO Follow On

6 6 Syneron IPO – The Building Blocks Underwriters selection Review and evaluation of 7 underwriters active in the medical equipment:  research coverage  sales network Underwriters negotiation and final selection Building the IPO team Legal counsel in the US and Israel Accountants in the US and Israel Syneron internal team Planning of Timeline Preparing prospectus SEC negotiation Roadshow timeline planning Closing and pricing preferred timing Preparation of Roadshow Presentation The desired message to be communicated in the following: growth, profitability, technology, team Roadshow team  post-transaction trading activities  European coverage

7 7 The Syneron Experience - IPO Underwriters: Citigroup, CIBC, Stephens Full North American, partial European Coverage Legal Counsel: Lead legal counsel - Bruce Mann - Morrison and Foerster, USA; Israeli counsel - Galia Amir - Primes, Shiloh, Givon, Meir Accountants: Ernst & Young Syneron Internal and Roadshow Team: Chairman, CEO, CFO, President of North America Timeline: Pricing and closing - in the first month of the quarter (July, 2004) to avoid the current (3 rd ) quarter financial information and discussion Roadshow - 3 weeks to cover Europe and the US – 100 meetings Preparing Prospectus - at least 2 months of preparation prior to roadshow Roadshow Message: High growth High profitability Breakthrough technology in a mature industry Experienced management team Successful IPO – 5 million shares, $ 12 per share

8 8 Roadshow Main Message- Superior Cost Structure Industry Av. 62%87% Gross Margin 45%40%S,G&A 5% R&D 12%42%EBIT 4%0%Tax 8%42%Net Profit Syneron Q gross margin is 87%. Compared with “laser industry” average of 62% (Lumenis, Palomar, Candela, Cutera and Laserscope) This high growth margin stems from Syneron proprietary and protected ELOS technology. The “laser industry” low gross margin protects Syneron from a “price-war”. P&L Structure

9 9 The Syneron Experience – Follow-On Secondary Underwriters: Lehman, CIBC, Citigroup, Stephens, Thomas Weisel, Unterberg Towbin Lehman and CIBC – co-book runners Legal Counsel: as in the initial IPO Accountants: as in the initial IPO Timeline: 6 months following the IPO Prospectus – minor changes to IPO, no review by the SEC Roadshow – short roadshow (8 days) Roadshow Message: We have delivered what we promised during the IPO roadshow Management and employees did not sell during the IPO Partial exit of financial investors, management and employees on equal basis Secondary shares only Existing shareholders agreed to additional lock-up period We sold 8 million shares from existing shareholders, we had orders for 20 million shares. Closing at $28/share.

10 10 The Syneron Experience: What To Do and What Not To Do Underwriter selection Always co-book runners Ensure European coverage – European underwriter on the team Legal counsel selection - experienced in negotiating with the SEC (US based) Clear Roadshow message which can be communicated in a 30 minute presentation Make sure that the sales team of the underwriter is well prepared to communicate your message to their clients Allow enough time for the underwriters sales people to prepare the field before your roadshow Not To Do … Don’t use your Israeli legal counsel as the lead counsel of the offering Don’t rush in the process – leave enough time for all the phases prior to the IPO Don’t sell management shares in the IPO Do not make promises during the roadshow that are beyond your reach. Everything you say is recorded and will come back at you in the future. Do not take everything that the underwriters say as given – make sure and cross check including during the roadshow. To Do …


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