Filed by PhotoMedex, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 of
the Securities Exchange Act of 1934
Press Release dated December 1, 2004
Subject Company: ProCyte Corporation
Commission File No. 0-18044
The following is a joint press release issued by PhotoMedex, Inc. and ProCyte
Corporation in connection with the pending acquisition of ProCyte Corporation by
PhotoMedex, Inc., pursuant to an Agreement and Plan of Merger dated as of
December 1, 2004, by and among PhotoMedex, Inc., Gold Acquisition Corp. and
ProCyte Corporation.
* * * *
NEWS RELEASE for December 1, 2004 at 4:05 pm EST
Contacts: PhotoMedex, Inc. ProCyte Corporation
Dennis McGrath, CFO Jack Clifford, President and CEO
215-619-3287 425-869-1239 x303
info@photomedex.com jclifford@procyte.com
PHOTOMEDEX AGREES TO ACQUIRE PROCYTE CORPORATION
MONTGOMERYVILLE, PA and REDMOND, WA (December 1, 2004)...PhotoMedex, Inc.
(Nasdaq: PHMD) and ProCyte Corporation (OTCBB: PRCY.OB) announced today that the
companies entered into a definitive merger agreement pursuant to which
PhotoMedex will acquire ProCyte in a stock-for-stock transaction valued at
approximately $24.4 million. Under the terms of the agreement, PhotoMedex will
issue 0.6622 shares of its common stock in exchange for each outstanding share
of ProCyte common stock. PhotoMedex expects to issue approximately 10.5 million
shares of common stock. In addition, certain options to purchase ProCyte common
stock will be assumed in the transaction. On a pro forma basis, assuming that
all ProCyte shareholders exchange their ProCyte shares for PhotoMedex shares,
and giving effect to the shares underlying the ProCyte stock options to be
assumed by PhotoMedex, ProCyte's stockholders would own approximately 21% of the
combined company's common stock on a fully diluted basis. Based on the closing
prices of the companies' common stock on November 30, 2004, the offer represents
a purchase price of $1.49 per share and a premium of 33%.
ProCyte develops and markets therapeutic and daily use skincare and
procedure-based products to dermatologists. Many of ProCyte's products
incorporate the company's patented GHK Copper Peptide technology. ProCyte sells
its products directly to physicians through its 25-person sales organization.
Physicians use the company's products to improve healing following aesthetic
procedures such as laser resurfacing, laser hair removal and microdermabrasion,
and for daily use to promote healthy skin and reduce hyperpigmentation, fine
lines and wrinkles. ProCyte also reaches the broader consumer markets through
license and supply agreements with strategic partners. For the twelve months
ended September 30, 2004, ProCyte reported total revenues of $13.0 million. In
addition, ProCyte currently has over $6 million in cash.
Jeff O'Donnell, President and CEO of PhotoMedex, commented, "PhotoMedex is
pleased to expand its presence in the dermatology community by acquiring a
company that is highly regarded by our customers and our scientific advisory
board. We immediately increase our dermatology sales force five-fold, which will
enable us to accelerate the roll out of our XTRAC laser therapy. ProCyte also
will provide us with a line of quality skin care products supported by accepted
science for our existing customers. This increase in our sales resources is
particularly timely to take advantage of an improving reimbursement environment
for laser therapy for psoriasis. The combined company will be able to offer
significant value to our dermatology customers by providing a proven treatment
option for psoriasis and provide effective pre- and post-procedure treatment
products that generate recurring revenue and an opportunity to improve practice
profitability. Financially, we are extremely pleased that this acquisition will
accelerate our profitability and is accretive to our shareholders."
Jack Clifford, ProCyte's President and CEO, stated, "We are very pleased
to be joining forces with PhotoMedex and are excited about the additional
opportunities that the combination offers our shareholders in terms of revenue
growth and improved liquidity. The companies share a vision for the future and
believe that, with our collective product offerings, we are well positioned to
further expand our presence in the marketplace. For the past several years,
ProCyte's management and board have focused their efforts to maximize
stockholder value. We believe this combination best positions ProCyte's
stockholders to capitalize on those efforts."
The merger is subject to customary terms and conditions including the
approval by the stockholders of ProCyte and PhotoMedex. The directors and
officers of ProCyte, who collectively own approximately 3.9% of the outstanding
ProCyte common stock, have agreed to vote all of their shares in favor of the
proposed transaction. The merger is expected to close in the first quarter of
2005.
In this transaction, CIBC World Markets and Wells Fargo Securities, LLC
acted as the financial advisors to PhotoMedex and ProCyte, respectively.
A conference call will be held on Thursday, December 2, 2004 at 8:00 a.m.
Eastern Time, during which, Jeff O'Donnell, the President and CEO of PhotoMedex,
and Jack Clifford, the President and CEO of ProCyte Corporation, will discuss
today's announcement. To participate in the conference call, dial 800-289-0546
and confirmation code #982899 approximately 5 to 10 minutes prior to the
scheduled start time.
If you are unable to participate, a digital replay of the call will be
available from Thursday, December 2 at 11:00 a.m. Eastern time until midnight on
Thursday, December 16, by dialing 888-203-1112 and using confirmation code #
982899.
The live broadcast of the PhotoMedex and ProCyte conference call will be
available online by going to www.photomedex.com and clicking on the link to
Investor Relations, and at www.streetevents.com. The online replay will be
available shortly after the call at those sites.
About PhotoMedex
PhotoMedex provides contract medical procedures to hospitals, surgi-centers and
doctors' offices, offering a wide range of products and services across multiple
specialty areas, including dermatology, urology, gynecology, orthopedics, and
other surgical specialties. The company is a leader in the development,
manufacturing and marketing of medical laser products and services.
About ProCyte
ProCyte Corporation develops and markets products based on its patented,
clinically proven Copper Peptide technology for skin health, hair care and wound
care. The Company sells directly to dermatologists, plastic and cosmetic
surgeons, spas and salons and through licenses with strategic partners into the
consumer market, including its long-term worldwide license agreement with
Neutrogena(R), a Johnson & Johnson company. ProCyte brands include Neova(R),
VitalCopper(R) Simple Solutions(R) and AquaSante(R) Skin Care products; Complex
Cu3(R) Post-Procedure Skin Care; GraftCyte(R) Hair Transplant Care; and
Tricomin(R) Advanced Care for Thinning Hair. The Company also has the exclusive
distribution rights in the physician market for Cutanix Corporation's
Quadrinone(R) technology in the U.S., Canada and Puerto Rico. Additional
information is available by visiting the Company's website at www.procyte.com.
SAFE HARBOR STATEMENT
This press release contains forward-looking statements within the meaning
of the "safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995. These statements are based on managements' current expectations and
beliefs and are subject to a number of factors and uncertainties that could
cause actual results to differ materially from those described in the
forward-looking statements. The forward-looking statements contained in this
release include statements about future financial and operating results of
ProCyte Corporation ("ProCyte") and PhotoMedex, Inc. ("PhotoMedex") and the
proposed acquisition of ProCyte by PhotoMedex .
The following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements: the risk that
ProCyte's business will not be integrated successfully with that of PhotoMedex,
costs related to the merger, failure of the ProCyte or PhotoMedex stockholders
to approve the merger, risks relating to technology and product development,
market acceptance, government regulation and regulatory approval processes,
intellectual property rights and litigation, dependence on strategic partners,
ability to obtain financing, competitive products and other risks identified in
PhotoMedex's and ProCyte's respective filings with the SEC. PhotoMedex and
Procyte are under no obligation to (and expressly disclaim any such obligation
to) update or alter these forward-looking statements, whether as a result of new
information, future events or otherwise.
In connection with the proposed merger, PhotoMedex will file with the
Securities and Exchange Commission ("SEC") a registration statement on Form S-4.
The registration statement will include a proxy statement of Procyte and a proxy
statement of PhotoMedex for a meeting of their respective stockholders to
consider and vote upon the proposed merger. The registration statement will also
serve as a prospectus of PhotoMedex with respect to the shares of PhotoMedex to
be distributed to stockholders of ProCyte in the proposed transaction.
PhotoMedex and ProCyte will file the proxy statement/prospectus with the SEC as
soon as practicable. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO CAREFULLY
READ THE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER TRANSACTION,
WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT
PHOTOMEDEX, PROCYTE, THE MERGER AND RELATED MATTERS.
In addition to the registration statement and proxy statement/prospectus,
both PhotoMedex and ProCyte file annual, quarterly and other reports, proxy
statements, registration statements and other information with the SEC. You may
read and copy any reports, statement or other information filed by PhotoMedex or
ProCyte at the SEC's public reference rooms at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or at any of the SEC's other public reference rooms in
New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330
for further information on the public reference rooms. Investors and security
holders may also obtain a free copy of the proxy statement/prospectus (when it
is available) and other documents filed by the companies at the SEC's web site
at http://www.sec.gov.
PhotoMedex, ProCyte, their respective officers and directors and certain
other members of management or employees may be deemed to be participants in the
solicitation of proxies from stockholders of ProCyte and PhotoMedex with respect
to the transactions contemplated by the merger agreement. A description of any
interests that PhotoMedex's or ProCyte's directors and executive officers have
in the proposed merger will be available in the proxy statement/prospectus.
This press release is not an offer to purchase shares of ProCyte, nor is
it an offer to sell shares of PhotoMedex common stock, which may be issued in
any proposed merger with ProCyte. Any issuance of PhotoMedex common stock in any
proposed merger with ProCyte would have to be registered under the Securities
Act of 1933, as amended, and such PhotoMedex common stock would be offered only
by means of a prospectus complying with such act.
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