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DS Healthcare to Acquire Medical Device, Dermatology Businesses.

M2 EQUITYBITES-February 24, 2016-DS Healthcare to Acquire Medical Device, Dermatology Businesses

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24 February 2016 - US-based biotechnology company DS Healthcare Group, Inc. (NASDAQ: DSKX) has signed a definitive agreement to acquire US medical device developer Radiancy, Inc. and the Neova dermatological products business from PhotoMedex, Inc., in a transaction structured in two reverse triangular mergers, with a non-dilutive provision, DS said.

Total consideration will be approximately USD 48m, paid in a combination of convertible preferred stock, common stock and a note.

The board of directors of both companies have voted unanimously in favor of the transaction. The transaction is subject to customary closing conditions, including shareholder approval and regulatory approvals.

Holders of approximately 24% of the common stock of DS Healthcare and approximately 17% of the common stock of PhotoMedex have agreed to vote their shares in favor of the merger, which is currently expected to close in the second quarter of 2016.

These valuable assets, combined with DS Healthcare's innovative research and development platform, will form a global company with a comprehensive product portfolio of both medical devices and topical formulations which are anticipated to bring rapid revenue growth.

DS said that the transaction significantly expands and strengthens its technological platform, geographic reach, and go-to-market channels.

Robust Cash Flow Generation and Prudent Financing Structure Provides Flexibility to Shareholders

The transaction includes a non-dilutive feature as the financing combination provides the ability for DS Healthcare to purchase the issued shares under a first right of refusal where DS Healthcare can limit dilution by purchasing shares through various financial instruments.

The structure also allows for future financial flexibility and continued execution of DS Healthcare's growth strategy.

Radiancy offers a pipeline consisting of numerous proprietary medical devices.

The acquired companies have unique expertise in device development, engineering, and testing as well as an FDA clearance mechanism.

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Publication:M2 EquityBites (EQB)
Date:Feb 24, 2016
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