Key Takeaways:
InMode's co-founder and CEO has teamed up with an investment vehicle to take the medical-device maker private at a 21% premium to its undisturbed price.
InMode Ltd. received an unsolicited $16.20-a-share cash buyout proposal from a group led by its co-founder and Chief Executive Officer Moshe Mizrahy, the company said Wednesday, sending shares up as much as 11%.
"The Board has approved formation of a special committee comprised solely of independent directors to evaluate the Proposal," InMode said in a statement, adding that the committee will assess the offer in consultation with its advisors.
The proposal from M.N. Business Strategy, which includes Mizrahy and his affiliates, represents a 21% premium to InMode's $13.35 close on Tuesday. Mizrahy, who co-founded the company, beneficially owns 4.3 million shares, or about 7.1% of the roughly 60.9 million shares outstanding, according to a Schedule 13D/A filing. He purchased 800,000 shares on the open market for $10.7 million over the prior 60 days using personal funds, the filing shows.
The offer puts InMode, a developer of radiofrequency-based medical devices for plastic surgery, gynecology and dermatology, in play at a time when the stock has struggled — down from levels above $20 a year ago. The special committee's review could lead to a deal, a competing bid or no transaction at all, the company cautioned, and it does not plan to provide further updates unless required by law.
Mizrahy's open-market purchases of 800,000 shares worth $10.7 million over two months preceded the buyout proposal by weeks, signaling conviction in the company's value at current levels. The $16.20 offer price values InMode's equity at roughly $987 million based on the most recent share count of 60.9 million.
InMode, headquartered in Yokneam, Israel, and listed on Nasdaq, markets a range of minimally invasive RF devices across plastic surgery, gynecology, dermatology, otolaryngology and ophthalmology. The company's revenue has faced headwinds as demand for aesthetic procedures softened in a higher-rate environment, though it reiterated full-year guidance as recently as its first-quarter earnings report in May.
The special committee has retained advisors to evaluate the proposal and explore strategic alternatives. Short interest stands at 5.1% of float with 2.5 days to cover, according to recent data, suggesting limited short-squeeze risk if the deal proceeds.
The administrative law process now begins with the special committee's evaluation. InMode said it does not intend to comment further on the process unless legally required. The company's market capitalization stood at roughly $846 million before the announcement, implying the offer represents a 17% premium to that valuation.
For shareholders, the key question is whether the $16.20 price represents fair value or whether a competing bidder could emerge. InMode's board has structured the review to consider all options, including alternative transactions or remaining independent.
This article is for informational purposes only and does not constitute investment advice.
