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Based in Yokneam, Israel, Lumenis (NASDAQ:LMNS) scheduled a $100 million IPO on the Nasdaq with a market capitalization of $564 million at a price range midpoint of $16 for Thursday, February 27, 2014.

The full IPO calendar is available at IPOpremium.

SEC Documents

Manager, Joint managers: Goldman Sachs, Credit Suisse, Jefferies

Co-Managers: Wells Fargo Securities

Summary

LMNS provides energy-based, minimally invasive clinical solutions primarily for the aging population.

It has established a strong brand across diverse end-markets, consisting of its surgical, ophthalmic and aesthetic segments.

Income statement metrics:

  • 2013 revenue was up 6.4% versus 2012 to $265 million.
  • Gross profit was 54% and increased 15.4% to $142 million.
  • Operating income increased 175% to $26 million.
  • After tax income increased $149% to $17 million, but the tax rate was only 14%.

LMNS believes that its focus on product development has resulted in its strongest pipeline of new products and applications in over a decade.

Valuation

Glossary

Valuation Ratios

Mrkt

Price /

Price /

Price /

Price /

% offered

Cap (MM)

Sls

Erngs

BkVlue

TanBV

in IPO

Lumenis Ltd.

$565

2.1

32.5

5.4

10.5

18%

Conclusion

LMNS is an Israeli-based global company sponsored by Goldman. Most Israeli-based global companies have done well in the IPO market.

LMNS's P/E ratio is a reasonable 32, and the new product pipeline is the strongest in over a decade.

The IPO rating on LMNS is a buy.

To put the conclusions and observations in context, the following is reorganized, edited and summarized from the full S-1 referenced above:

Business

LMNS is a leading global, highly diversified and growing provider of innovative energy-based, minimally invasive clinical solutions primarily for the aging population.

It has established a strong brand and leadership position across diverse end-markets, consisting of its surgical, ophthalmic and aesthetic segments, and its products are utilized for both medically necessary and elective procedures.

LMNS focused product offerings include solutions for a wide range of minimally invasive procedures across those segments.

Product pipeline

LMNS' focus on product development has resulted in its strongest pipeline of new products and applications in over a decade.

Specifically, LMNS expects to launch one to two new product platforms in each of its three segments by the end of 2014.

Target markets

The principal target markets for LMNS' products are hospitals, outpatient clinics, ambulatory surgery centers, physicians' offices, private clinics and aesthetic chains.

Sales & Marketing

LMNS markets, sells and services its products primarily through its direct sales and service organization, which provides it with a strong presence in its key markets, including the United States, China, Japan, India, Germany and Australia, which generated 70% of its revenues for the year ended December 31, 2013.

LMNS sells to the remainder of its geographies through an extensive global distributor network, consisting of over 170 independent distributors in over 70 countries worldwide.

LMNS' service organization of over 200 people supports the growth of its global customer base and provides it with an attractive recurring revenue stream.

LMNS believes it is well-positioned to capitalize on the large and growing emerging markets opportunity, specifically the APAC region, where China represents LMNS' second largest individual market globally (after the United States) and which LMNS believes will be an important driver of its future growth.

LMNS generated $86.1 million in revenues in the APAC region for the year ended December 31, 2013, representing 14.9% year-over-year growth and 32.5% of LMNS' total revenues for that period.

Dividend Policy

No dividends planned.

Intellectual Property
LMNS holds more than 140 patents in the United States and an additional 85 patents throughout the rest of the world and has outstanding applications for 32 patents in the United States and 40 patents outside of the United States as of December 31, 2013.

LMNS believes that its patent portfolio alone may not provide a significant advantage over its competitors and therefore, the competitive advantage depends on LMNS's ability to leverage its current brand strength and existing market position

Competition

Competition arises from laser and other light-based products, as well as from other treatment modalities and alternate technologies that are not based upon laser or light-based technologies.

LMNS also faces competition from companies selling accessories to, and offering services for, its products, as well as companies selling devices, particularly in the aesthetic market, for home use. Competitors range in size from small, single product companies to large, multinational corporations, which may have greater resources than LMNS.

LMNS' principal direct competitors consist of the following companies:

Surgical - American Medical Systems; Deka Laser Technologies; Dornier MedTech America; Karl Storz; Lisa Laser Products and OmniGuide.

Ophthalmic - Carl Zeiss Meditec; Ellex; Iridex; Nidek and Quantel Medical.

Aesthetic - Alma Lasers; Cutera; Cynosure; Solta Medical and Syneron.

5% stockholders

Viola-LM Partners L.P. and affiliates 45.9%

XT Hi-Tech Investments (1992) Ltd. and affiliates 31.4%

Bank Hapoalim B.M. 5.2%

Harel Beit-On 46.3%

Use of proceeds

LMNS expects to net $90.2 million from its IPO. Proceeds are allocated as follows:

Operations and for other general corporate purposes, including but not limited to working capital requirements, capital expenditures, investments, research and development, product development and sales and marketing expenditures.

LMNS may also use a portion of the net proceeds for the potential acquisition of, or investment in, technologies, products or companies that complement its business, although LMNS has no understandings, commitments or agreements to consummate any such acquisition or investment.

Disclaimer: This LMNS IPO report is based on a reading and analysis of LMNS's S-1 filing, which can be found here, and a separate, independent analysis by IPOpremium.com. There are no unattributed direct quotes in this article.

Source: IPO Preview: Lumenis