YOKNEAM, Israel, Oct. 3 /PRNewswire/ -- Lumenis(R) Ltd. a global developer, manufacturer and seller of laser, light- and radiofrequency-based devices for medical, aesthetic, ophthalmic, dental and veterinary applications, announced it had signed a definitive Purchase Agreement with LM Partners L.P. and Ofer Hi-Tech Group for an investment of $120 million in exchange for newly issued common shares. LM Partners L.P., led by Mr. Harel Beit-On, and Ofer Hi-Tech, led by Mr. Ehud Angel, are leading private equity firms based in Israel with several successful private equity investments in global companies.

In connection with and as a condition to closing of the transactions contemplated by the Purchase Agreement, the Company has entered into a definitive agreement with Bank Hapoalim B.M. to restructure the Company's estimated $205 million of outstanding debt. Pursuant to the Restructuring Agreement, from the time of closing through the end of 24 months post-closing, the principal amount of the debt net of all post-closing loan repayments of $80 million and write offs of $50 million will be approximately $75 million, based on the current debt level.

"We welcome this infusion of new capital from this recognized group of experienced investors and the contributions they will make to the Company. We also appreciate the cooperative relationship with Bank Hapoalim, which has supported Lumenis throughout and worked with the investors to quickly and efficiently create a new financing structure for the Company. These agreements represent major milestones for Lumenis and completes the final element critical to our Turnaround Plan for the Company," commented Avner Raz, Lumenis President and Chief Executive Officer.

"Both the debt load from the past and the heavy burden of bringing current our financial reporting have limited our ability to invest in growth activities. Closing this transaction will provide us with approximately $80 million in cash that can be deployed to accelerate new product development and to improve our supply chain in order to enhance customer service. Also, we will have deleveraged our balance sheet and restructured our remaining debt to a manageable and less costly level. We have plans ready for many new initiatives in each of our product segments and are excited to be able to launch these initiatives in the markets we serve," Mr. Raz added.

Upon shareholder approval, Mr. Harel Beit-On will become Lumenis' Chairman of the Board of Directors. Mr. Beit-On is the former Chairman and CEO of Tecnomatix, which was sold in 2005 to UGS for $230 million, and the former Chairman of ECtel (Nasdaq: ECTX) during its recovery process until the beginning of 2006. Mr. Beit-On commented, 'We are very excited about the opportunity to invest in a company with Lumenis' position in the industry. This new infusion of capital will allow us to aggressively build on Lumenis' already strong portfolio of products and unsurpassed patent position to bring new innovative products to the market. We believe that the investment will result in significantly improved value for all shareholders."

Yoav Doppelt, Ofer Hi-Tech's CEO, will join Lumenis' Board of Directors following shareholder approval. Mr. Doppelt brings with him years of experience in the medical device industry and will be an active director in the Company's affairs.

Pursuant to the Purchase Agreement, the LM Partners and Ofer Hi-Tech will purchase from the Company for $120 million ordinary shares at a price per share of $1.0722 representing approximately a 75% interest in the Company following closing.

Under the provisions of the Companies Law, the proposed private placement requires approval by our shareholders. The Company intends to solicit shareholder approval at a meeting planned for early November. The closing of the Purchase Agreement is subject to shareholder approval of several items to be submitted in a proxy statement expected to be sent shortly. Closing is also subject to other closing conditions as detailed in the Purchase Agreement.

About Lumenis

Lumenis is a global developer, manufacturer and seller of laser, light- and radiofrequency-based devices for medical, aesthetic, ophthalmic, dental and veterinary applications. The Company offers a wide range of products along with extensive product support systems including training, education and service. Lumenis invests heavily in research and development to maintain and enhance its leading industry position. The Company holds numerous patents worldwide on its technologies. For more information about Lumenis and its products, log onto www.lumenis.com.

About the Investors

LM Partners L.P. is a limited partnership formed in connection with the private placement by the general partner, a newly formed partnership affiliated with a Private Equity Group led by Mr. Aharon Dovrat, his son Shlomo Dovrat, Harel Beit-On and Avi Zeevi Beit-On. The group, formed in 1999, is an exclusive private investment group operating from Israel. The group is focused on the initiation and management of specialized private equity and venture capital funds investing mainly in Israeli or Israeli- related companies. The group members have years of experience in the initiation, growth, operations, management and exits of medium-to large-scale international businesses in a variety of industries. The group currently oversees the management of approximately $900 million in private equity investments, including several private equity funds, each with its own specialized investment focus. The group's investors include a range of renowned "blue chip" institutional and corporate investors from all over the world.

Ofer Hi-Tech Group. The Ofer Hi-Tech group (controlled by Ofer (Ship Holding) Ltd.) was established in 1997 as a subsidiary of the Ofer Brothers Group, one of Israel's leading industrial and commercial conglomerates with a strong international presence, and is beneficially held by Mr. Ehud Angel and Mr. Eyal Ofer. The team was assembled to support private equity investments in the pioneering and rapidly expanding healthcare and information technology industries. Ofer Hi-Tech, managed by Yoav Doppelt, is recognized within the Israeli community as the country's leading partner for healthcare companies. As a result of its intense activities in the field, the Ofer Hi Tech's management team has acquired a wealth of experience dealing with the unique challenges and hurdles faced by life science companies such as milestone driven research and development plans, sales and distribution in the field, partnering with large corporate entities, regulatory and reimbursement strategies and recruitment of specialized personnel.

LM Partners and Ofer Hi-Tech groups enjoy excellent business relations and have joined in transactions in the past, such as the investment in Tecnomatix Technologies Ltd. and the ECI telecom PIPE.

    For further information:

    Investors:
    Lauri Hanover
    Chief Financial Officer
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    Media:
    Michelle Maydan
    Director of Corporate Communications
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SOURCE Lumenis Ltd.