The Australian competition authority is examining Ellex Medical Lasers’s proposed $100 million sale of its laser and ultrasound business to Lumibird to consider its impact on market competition and the pricing of related ophthalmic devices.
On 1 May, a week after Ellex shareholders approved the sale at an extraordinary meeting, the Australian Competition and Consumer Commission (ACCC) advised both companies it would undertake a public review of the acquisition.
Lumibird is a French headquartered technology company whose subsidiary, Quantel Medical, develops lasers and ultrasound machines for ophthalmic procedures. Australian supplier Device Technologies distributes the devices locally.
According to the ACCC, both Lumibird and Ellex’s lasers and ultrasound business overlap in the supply of several instruments, including low energy pulse lasers for glaucoma, high energy photocoagulation lasers for retinal disease, high energy photodisruption lasers for post cataract scar tissue and vitreous floaters and diagnostic ultrasound devices.
“The ACCC’s investigation is focused on the impact on competition. In particular, we are seeking views on; whether Ellex Lasers and Ultrasound and Lumibird compete closely; the likely impact on prices; alternative suppliers of overlapping products; and the use of other treatment methods for eye conditions treated by lasers,” the government agency stated on its website.
“The legal test which the ACCC applies in considering the proposed acquisition is in section 50 of the Competition and Consumer Act 2010. Section 50 prohibits acquisitions that are likely to have the effect of substantially lessening competition in a market.”
The ACCC sought submissions on the acquisition, which closed on 15 May. It will aim to release its findings on 25 June, which could either be a final decision or a release of a Statement of Issues.
Ellex head of investor relations and corporate development Dr Tom Duthy confirmed both Ellex and Lumibird have made submissions to ACCC.
“I can’t disclose the contents of those submissions; however, clearly the ACCC is interested in the effects of such a transaction of laser and ultrasound competition in Australia,” he told Insight.
“We can’t speculate on the outcomes of the ACCC public review, we just have to let the process run and their determination will be made on 25 June.”
The transaction relates only to Ellex’s laser and ultrasound business. The company will retain its 2RT therapy for intermediate age-related macular degeneration and iTrack therapy for glaucoma.