Presentation on theme: "Syneron IPO and Follow- On Offering"— Presentation transcript:
1 Syneron IPO and Follow- On Offering Management Experience
2 Syneron History in Brief 2000 – Inception, $ 1.3 M raised from founders. ELOSTM technology development2001 – Launch AuroraTM, first European Regulatory approval2002 – Start sales in Europe and Canada, establishment of North American sales and marketing, first FDA , launch of Aurora in North AmericaRevenue of $ 12 M, net profit of $ 2.5 M2003 – Expansion of marketing and sales network to establish global presence: NA, Europe and Asia; introduction of PolarisTM and PitangaTMRevenue of $ 35 M, net profit of $ 15 M2004 – Expansion of product portfolio, introduction of GalaxyTM, VelaTM and CometTM; Successful IPORevenue of $ 58 M, net profit of $ 27 M2005 – Successful follow-on offeringExpected revenue of $ 80 M and net profit of $ 36 M
3 Syneron has demonstrated 13 consecutive quarters of growth… ($ in millions)Follow OnIPOCQGR (Compounded Quarterly Growth Rate): 34%2001200220032004= International Sales= North America Sales
4 …And a Focus on Profitability Follow On($ in millions)Note: Excludes charges related to Lumenis litigation2001200220032004IPO
5 Syneron has created value for Syneron shareholders… Follow On300% growth in share price since IPO
6 Syneron IPO – The Building Blocks Underwriters selectionReview and evaluation of 7 underwriters active in the medical equipment:research coveragesales networkUnderwriters negotiation and final selectionBuilding the IPO teamLegal counsel in the US and IsraelAccountants in the US and IsraelSyneron internal teamPlanning of TimelinePreparing prospectusSEC negotiationRoadshow timeline planningClosing and pricing preferred timingPreparation of Roadshow PresentationThe desired message to be communicated in the following: growth, profitability, technology, teamRoadshow teampost-transaction trading activitiesEuropean coverage
7 The Syneron Experience - IPO Underwriters: Citigroup, CIBC, StephensFull North American, partial European CoverageLegal Counsel: Lead legal counsel - Bruce Mann - Morrison and Foerster, USA;Israeli counsel - Galia Amir - Primes, Shiloh, Givon, MeirAccountants: Ernst & YoungSyneron Internal and Roadshow Team: Chairman, CEO, CFO, President of North AmericaTimeline:Pricing and closing - in the first month of the quarter (July, 2004) to avoid the current (3rd) quarter financial information and discussionRoadshow - 3 weeks to cover Europe and the US – 100 meetingsPreparing Prospectus - at least 2 months of preparation prior to roadshowRoadshow Message:High growthHigh profitabilityBreakthrough technology in a mature industryExperienced management teamSuccessful IPO – 5 million shares, $ 12 per share
8 Roadshow Main Message- Superior Cost Structure P&L StructureSyneron 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”.Industry Av.62%87%Gross Margin45%40%S,G&A5%R&D12%42%EBIT4%0%Tax8%Net Profit
9 The Syneron Experience – Follow-On Secondary Underwriters: Lehman, CIBC, Citigroup, Stephens, Thomas Weisel, Unterberg TowbinLehman and CIBC – co-book runnersLegal Counsel: as in the initial IPOAccountants: as in the initial IPOTimeline:6 months following the IPOProspectus – minor changes to IPO, no review by the SECRoadshow – short roadshow (8 days)Roadshow Message:We have delivered what we promised during the IPO roadshowManagement and employees did not sell during the IPOPartial exit of financial investors, management and employees on equal basisSecondary shares onlyExisting shareholders agreed to additional lock-up periodWe sold 8 million shares from existing shareholders, we had orders for 20 million shares. Closing at $28/share.
10 The Syneron Experience: What To Do and What Not To Do Underwriter selectionAlways co-book runnersEnsure European coverage – European underwriter on the teamLegal counsel selection - experienced in negotiating with the SEC (US based)Clear Roadshow message which can be communicated in a 30 minute presentationMake sure that the sales team of the underwriter is well prepared to communicate your message to their clientsAllow enough time for the underwriters sales people to prepare the field before your roadshowDon’t use your Israeli legal counsel as the lead counsel of the offeringDon’t rush in the process – leave enough time for all the phases prior to the IPODon’t sell management shares in the IPODo 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.