ICTV Brands to Acquire Consumer Products Business of PhotoMedex (PHMD) for $9.5M

October 6, 2016 6:53 AM EDT

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ICTV Brands announced the signing of a definitive agreement to acquire the consumer products business of PhotoMedex, Inc. (NASDAQ: PHMD) for a total consideration of $9.5 million.

The agreement calls for ICTV to acquire the assets of PhotoMedex's flagship product no!no!, along with the Kyrobak and Cleartouch brands. The purchase price of $9.5 million consists of a $3 million cash payment on closing, $2 million cash payment due on the 90th day following the closing, and a $4.5 million capped royalty based on future net sales of the acquired product lines. This asset purchase will include the respective product trademarks, patents, and other intellectual property, along with manufacturing tooling, and PhotoMedex's Hong Kong and Brazilian subsidiaries. ICTV will also receive a minimum of $6 million of GAAP inventory.

In addition to the tangible assets, ICTV will acquire highly experienced research and development, logistics, sales and marketing personnel. The R&D and logistics group, based in Israel, have a long history of developing unique and successful at-home health and beauty devices. The sales and marketing team, based in the US and UK, will provide seamless integration of the acquired brands into ICTV's platform.

The Board of Directors of both ICTV and PhotoMedex have unanimously approved this agreement. In addition, ICTV's Board has approved a financing of up to $7 million in a private placement of common shares priced at $0.34. To date, $3 million of this raise has been placed in escrow, led by a group of existing shareholders. The additional $2 million that has been secured is in the form of an irrevocable letter of credit. Assuming the closing of both the acquisition and the $7 million equity financing, the Company expects to have over $3 million in cash, no debt, and approximately 51 million shares outstanding. The closing of the acquisition and the financing are subject to customary closing conditions.

Richard Ransom, President of ICTV Brands, stated, "The acquisition of the no!no! brand will be transformative to our organization and accretive to our shareholders. By combining these great brands under one platform, ICTV should gain the operating leverage and cost savings to generate significant EBITDA and cash flow going forward. We believe this transaction will firmly establish ICTV Brands as a worldwide leader in the health and beauty device industry."

no!no!, launched in 2006, is the first professional hair removal device for in-home use with patented Thermicon technology. The product line has grown from its original version, now known as the no!no! Classic, to include seven more hair removal products, including no!no! LITE, no!no! PLUS, no!no! MICRO, no!no! Hair, no!no! Hair for MEN, no!no! PRO and no!no! ULTRA, all with different features and technologies. In addition to the hair removal line, no!no! expanded to include no!no! Skin for pimple treatments, and no!no! Smooth, a full skincare line formulated with hair growth inhibitors. With over 6 million units sold and over $1 billion dollars in sales since inception, no!no! has established itself as a leader in the hair removal category.

ICTV Brands' Chairman and CEO Kelvin Claney added, "Over the last two years, we have repositioned ICTV to take full advantage of the rapid expansion of the digital marketplace. Our team has built and continues to refine a multi-channel sales platform to deliver profitable sales of health and beauty products across all methods of distribution, including e-commerce, traditional brick and mortar, direct to consumer, live home shopping, and international distributorships. The timing of the acquisition of no!no! and the associated brands is perfect, as it will allow ICTV to accelerate growth through the Company's new multi-channel sales platform. Through operational efficiencies, I believe the synergies created by these two great brands, no!no! and DermaWand, will generate significant growth and earnings both now and in future years."

The transaction is expected to close in the 4th quarter of 2016.

For more information on ICTV Brands product, DermaWand, or the no!no, Kyrobak, and ClearTouch brands, please visit each products respective consumer websites:

  • www.dermawand.com
  • www.officialnono.com
  • www.kyrobak.com
  • www.cleartouchnails.com

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