Dive Brief:
- Alcon has agreed to buy implantable lens maker STAAR Surgical for about $1.5 billion in total equity value, the companies said Tuesday.
- Alcon, which will purchase all outstanding shares of STAAR for $28 per share in cash, expects STAAR’s refractive surgery offerings to complement Alcon’s laser vision correction business.
- BTIG analyst Ryan Zimmerman said Alcon is getting “a solid deal” given STAAR’s setbacks in the China market. The company is betting on a recovery in China and the longer-term health of lens-based refractive surgery, said the analyst.
Dive Insight:
Weak consumer spending in China, STAAR’s largest market, has hurt the company’s cash-pay implantable Collamer lenses business, leading to a roughly $20 million net loss in fiscal 2024 and layoffs.
For STAAR, “our immediate thought is that this is the best path forward … as they were likely to struggle for some time given the dynamics in the broader Chinese economy,” Zimmerman wrote in a note to clients.
The acquisition immediately bolsters Alcon’s presence in the surgical refractive market, said Zimmerman.
Alcon said the number of people with severe nearsightedness is rising across the globe.
“The acquisition of STAAR enhances our ability to offer a leading surgical vision correction solution for those who are not ideal candidates for other refractive surgeries such as LASIK,” CEO David Endicott said in a statement. “This transaction will allow us to provide treatment options across the full spectrum of myopia – from contact lenses to surgical interventions.”
Alcon plans to finance the deal through short- and long-term credit facilities and anticipates it will close in about six months to a year. STAAR shareholders must still approve the sale, which has received the go-ahead from both companies’ boards.
Alcon expects the transaction to be accretive to earnings in the second year after closing.
