This article is more than 5 years old. Information may no longer be current.
Alcon to buy Summit for $19 per share
The $893 million deal will makes the big three ophthalmic companies competitors in refractive surgery.
Click Here to Manage Email Alerts
FORT WORTH, Texas — Alcon plans to buy Summit Autonomous for $19 per share in a cash deal made after months of negotiations and not quite 2 weeks after a marketing alliance between major competitors of each company was announced.
In the final agreement between the two companies, the boards of Alcon and Summit unanimously approved the deal, leaving only regulatory and shareholder approval pending. Industry insiders began trading rumors of the merger early this year. If the final deal held any surprises, it was that the announcement followed rather than coincided with the annual meeting of the American Society of Cataract and Refractive Surgery.
According to a company press release, Alcon will begin the offer by June 5. Any shares not purchased in the offer will be bought for the same price in cash in a second-step merger. At $19 per share, the almost 47 million outstanding Summit Autonomous shares would cost Alcon approximately $893 million.
"Alcon has long been committed to entering the strategically critical refractive surgical market," said Tim Sear, Alcon's president and chief executive officer in the press release announcing the terms of the share purchase offer. "Our comprehensive global technological review, and, above all, the advice of top refractive surgeons, led us to the firm conviction that Summit Autonomous is the clear technological leader in the refractive field. I am confident that the combination of Alcon's powerful, worldwide surgical sales and marketing organization with the highly skilled Summit Autonomous team will be in the best interest of both surgeons and patients."
Robert J. Palmisano, chief executive officer of Summit Autonomous Inc. was quoted in the press release saying that "It is a tribute to everyone in the Summit Autonomous family that such a well-respected organization as Alcon has decided to purchase our company. I believe these two companies will combine into a powerhouse organization that will deliver leading edge products to customers around the world."
Summit’s vice president of investor relations and corporate communications, Kate Sturgis Burnham, told Ocular Surgery News, "Now we’ll be joining forces with a company that has greater resources than we do to expand the business."
She added, "It really provides the company with a lot of resources, huge international resources, much more than we currently have. And [Alcon is] owned by Nestlé, and behind that are even greater resources."
More confidence
According to industry commentator David Harmon, president and senior editor of MarketScope, the Alcon-Summit Autonomous merger and other industry alignments puts a tremendous amount of pressure on refractive companies and will make it very difficult for them to keep or capture a dominant market share.
Allergan and Visx recently formed a marketing alliance (see "Allergan, Visx form marketing alliance for refractive products"), creating a new avenue for refractive surgeons to access the equipment and adjuncts they need for surgery. Bausch & Lomb has had a full line of laser, microkeratome and topography systems available and is aggressively pursuing approvals for new indications and new technology. Nidek and LaserSight, the other companies with FDA-approved lasers and microkeratomes, have less broad product lines in ophthalmology.
"You’re really going to have a battle of those [big] three," Mr. Harmon said. "You have a very strong marketing and sales effort both in this country and internationally. It will make it very difficult for other companies to establish market share."
The potential benefits for excimer laser users is that when they buy equipment today as opposed to several years ago, they know now that it is backed by larger, more stable companies – companies that have taken their time getting into the volatile refractive surgery business.
"Alcon needed to be in the refractive business," Mr. Harmon said. "This is a good choice for them because it gives them access to an excimer laser, a microkeratome and a wavefront design. It gives them an existing base of excimer lasers all over the world, which really positions Alcon well. This is a widely expected, and most everyone was surprised that they didn’t hear about it at ASCRS."