Dallas, Texas 07/02/2015 (Financialstrend) – PhotoMedex Inc (NASDAQ:PHMD) has paid off all its outstanding debt that totaled $40.1 million. The company got the cash to pay the debt from the sale of its XTRAC and VTRAC psoriasis treatment business. Mela Sciences Inc (NASDAQ:MELA) paid $42.5 million for the two businesses consequently relieving PhotoMedex of any debt payment pressure.
Mela Financing Structure
Mela is to finance the deal through a large debt offering by issuing senior secured notes, senior secured debentures valued at $42.5 million. The company has also issued aggregate principal amount of Notes bearing a 9% per year interest. PhotoMedex Inc (NASDAQ:PHMD) is to place $750,000 of the purchase price under an escrow account held by US Bank National Association.
As part of the acquisition, Mela is to make offers of employment to certain employees of the transferred business. PhotoMedex Inc (NASDAQ:PHMD) has also given Mela leases for its facilities located in Carlsbad and Pennsylvania California.
Mela is to provide Peregrine with human resource IT support among other services for a period of not less than one month or more than ten months as part of the deal. In return, Peregrine is to continue providing Mela with marketing, benefits payroll among other services.
Focus on Core Business
Chief executive officer, Dr. Dolev Rafaeli, expects the company to focus on its core consumer and skincare business going forward. PhotoMedex Inc (NASDAQ:PHMD) also plans to pay more attention to its no! no! Hair removal product that has been loved by fans. The brand is also made of products for acne treatment and skin rejuvenation.
PhotoMedex Inc (NASDAQ:PHMD) is now debt free four years after being forced to enter into a reverse merger deal with Radiancy Inc. The company tapped into the laser eye correction field last year after buying Cincinnati-based LCA-Vision for $106.4 million. However early this year it was forced to sell off the unit as it sought cash to pay down its debt to Vision.