Bovie Medical (NYSE:BVX) shares rode a roller coaster today on the news that it’s dealing its core electro-cautery business to Symmetry Surgical for $97 million and is on track to beat estimates with its second-quarter sales.
Clearwater, Fla.-based Bovie, which is making a pivot toward the cosmetic surgery market, said the all-cash deal for the electrosurgical and cauteries business includes its namesake brand. It also involves transition services, patent licensing, disposables supply and generator manufacturing agreements; Bovie said the latter term sets it up as an OEM supplier to Symmetry “at least” a decade.
That leaves the advanced energy business and a pair of sites in Clearwater and Sofia, Bulgaria under the company’s belt, as it looks to commercialize its J-Plasma and Renuvion offerings. Bovie also said that president Robert Saron is slated to step down to join Symmetry after the deal closes, expected during the third quarter.
“Today’s announcement of the divestiture and sale of our core business segment to Symmetry is a major strategic transaction for Bovie Medical,” CEO Charlie Goodwin said in prepared remarks. “The core electrosurgical and cauteries business is the foundation of Bovie Medical and we are extremely proud of the success we have had with this business which dates back to the company’s inception many years ago. At the same time, we believe the customers and employees of Bovie Medical’s core business are best-positioned going forward with the focus and investment they will receive under Symmetry’s ownership.
“This is a milestone moment for the company, one that creates significant value for our shareholders by significantly enhancing our balance sheet with the addition of more than $70 million in estimated net cash proceeds after taxes and transaction related expenses and allowing us to further focus the organization on our strategic objective of commercializing our J-Plasma/Renuvion technology in the cosmetic surgery market.”
Bovie also said it expects to report sales of roughly $11.2 million to $11.5 million for the three months ended June 30, up 15% to 17% compared with Q2 2017. Analysts on Wall Street are looking for Q2 sales of $10.1 million and losses per share of -1¢.
“We are extremely pleased with our second quarter revenue results which were fueled by another quarter of strong demand for our Renuvion Cosmetic Technology,” Goodwin said. “We remain convinced that Renuvion represents a game changing technology with the potential to achieve attractive outcomes for physicians and their patients in the cosmetic surgery market and look forward to continued progress towards our goal of expanding adoption in the years to come.”
BVX shares surged to a 52-week high of $5.47 today before plunging to $4.95 apiece in heavy late-morning trading, down -0.8% on the day.