International consumer electronics giant Philips is in negotiations to buy Israeli medical equipment maker Lumenis. Both Philips and Lumenis declined to comment on the report. Lumenis, which employs 900, specializes in equipment based on laser technology for esthetic treatments as well as dental and eye treatments.
The company is in a rapidly expanding business sector, even if it is hard to tell from its regular financial reports. But it is possible to see the growth possibilities from the reports of its rivals, particularly Syneron, which regularly reports growth rates in the esthetic laser treatments sector. Avner Raz, CEO of Lumenis for the past 2 years, has been trying to move the firm onto the path of profitability and growth, and to renew the firm's reputation for trustworthiness.
Mr. Raz, who was previously the CEO of Elisra, and before that a senior officer in the Israel Defense Forces, has tried to stop the company from hemorrhaging cash over the last 2 years. He has closed plants, reorganized the company, outsourced everything he could, and fired workers. Today, Lumenis has only 900 employees and Mr. Raz wants to concentrate on what the company knows best; development based on laser technologies.
As much as Mr. Raz wants to see Lumenis finally make a profit, he has yet to succeed. The company lost U.S. $6 million in the first quarter of 2005, on $65 million in revenues. Even more troubling is Lumenis' balance sheet. It owes $190 million to Bank Hapoalim. At the end of 2003, Lumenis and the bank reached an agreement over the debt, and postponed any repayments on the principal to 2006, while requiring $15 million a year in interest payments. (International News Alliance)
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