PhotoMedex, a Horsham skin health company, said it will sell its consumer and professional products businesses to DS Healthcare Group in Pompano, Fla. for $48 million in stock and a note over three years.

The boards of PhotoMedex and DS Healthcare have unanimously approved the deal, which is expected to close in the second quarter. PhotoMedex said the sale is a good strategic fit, with complementary product expertise, economies of scale, and international reach.

Under the terms, PhotoMedex shareholders will own about 43 percent of the company, and DS Healthcare shareholders will own about 57 percent. DS Healthcare will issue convertible preferred and common stock and a $4.5 million note.

When the deal closes, DS Healthcare will pay PhotoMedex $1.5 million; an additional $2 million plus interest in September, and in three years a final $1 million plus interest.

"Every 90 days PhotoMedex is entitled to sell a portion of the stock, and distribute the proceeds periodically to its shareholders," said Dennis McGrath, PhotoMedex president and chief financial officer. "That's how we are going to get the $48 million to our shareholders."

PhotoMedex CEO Doley Rafaeli said the company's Neova professional skin care line "will move seamlessly" into DS Healthcare's sales forces in Mexico, Spain, and Colombia and to distributors in Canada, Portugal, Italy, South Africa, China, and Brazil. DS Healthcare products will also benefit from PhotoMedex' consumer marketing expertise.

"Through this transaction we will expand our professional aesthetic and therapeutic skin care portfolio in anti-aging skin care and specialty skin care products used post-hair transplantation, and add to our portfolio of at-home products for hair removal, acne treatment and back pain relief," said Daniel Khesin, chairman and founder of DS Healthcare Group. "We will have a truly global footprint and a massive marketing structure to unlock extraordinary synergies and opportunities for our shareholders."

lloyd@phillynews.com

215-854-2831

@LoydLinda