DEFA14A: LENSAR Supplements Proxy Statement Amid Shareholder Demands Regarding Alcon Merger

LENSAR, Inc. filed a supplement to its definitive proxy statement for the proposed merger with Alcon Research, LLC, providing additional disclosures to address shareholder demand letters alleging omitted material information.

Summary

• LENSAR, Inc. filed a Supplement to its Definitive Proxy Statement (filed May 19, 2025) concerning the merger with Alcon Research, LLC.
• The supplement addresses several demand letters from purported LENSAR stockholders alleging the Definitive Proxy Statement (and Preliminary Proxy Statement filed May 7, 2025) omits material information regarding the merger, violating Sections 14(a) and 20(a) of the Securities Exchange Act of 1934.
• LENSAR denies any further disclosure is required but provides supplemental disclosures solely to moot claims and minimize litigation risks, without admitting liability or wrongdoing.
• Supplemental disclosures amend sections related to the "Background of the Merger," clarifying that post-transaction employment or equity participation for LENSAR's executive officers was not discussed during negotiations from February 21, 2025, to February 26, 2025.
• Supplemental disclosures amend the "Opinion of the Financial Advisor to LENSAR" section, specifically the "Selected Public Companies Analysis," "Selected Precedent Transactions," and "Discounted Cash Flow Analysis."
• The "Selected Public Companies Analysis" now includes a reference range of multiples of 4.00x to 5.25x for 2025E Revenue and 3.00x to 4.00x for 2026E Revenue, indicating an implied per share value range of $12.27 to $16.51, compared to the Cash Consideration of $14.00 and Discounted Consideration Amount of $16.03.
• The "Selected Precedent Transactions" analysis now applies a multiple range of 4.5x to 6.0x to LTM Revenue and 4.0x to 5.5x to NTM Revenue, indicating an implied per share value range of $10.53 to $18.30, compared to the Cash Consideration of $14.00 and Discounted Consideration Amount of $16.03.
• The "Discounted Cash Flow Analysis" now indicates an implied per share value range of $9.89 to $12.53, compared to the Cash Consideration of $14.00 and Discounted Consideration Amount of $16.03, after accounting for LENSAR's net debt of approximately $15 million as of February 28, 2025, and anticipated equity raises.
• Supplemental disclosures also amend the "Material U.S. Federal Income Tax Consequences of the Merger to Holders of Shares of LENSAR Common Stock" regarding the treatment of CVRs as "open transactions" and "future payments on the CVRs."

Sentiment

Score: 4

Explanation: The document is a defensive legal filing addressing shareholder allegations of insufficient disclosure regarding a merger. While it provides additional financial details, the underlying context is negative (litigation risk), and the company explicitly denies the necessity of the disclosures, indicating a reactive rather than proactive positive development.

Positives

• The company is proactively providing supplemental disclosures to address shareholder concerns and mitigate potential litigation, even while denying the necessity of such disclosures.
• The financial analysis provided by WFS (LENSAR's financial advisor) offers detailed valuation ranges for LENSAR Common Stock, which in some cases overlap with or exceed the proposed merger consideration.

Negatives

• Receipt of several demand letters from purported LENSAR stockholders alleging omissions of material information in the proxy statements.
• Allegations that disclosures are false and misleading, violating Sections 14(a) and 20(a) of the Securities Exchange Act of 1934.
• The company is incurring costs, burden, nuisance, and uncertainties inherent in litigation, even if it believes the claims are without merit.
• The Discounted Cash Flow Analysis indicated an implied per share value range ($9.89 to $12.53) that is lower than both the Cash Consideration ($14.00) and the Discounted Consideration Amount ($16.03).

Risks

• The proposed Merger may not be completed in a timely manner or at all, including risks related to regulatory approvals or stockholder approval.
• Failure to realize the anticipated benefits of the proposed Merger.
• Possibility of competing offers or acquisition proposals for LENSAR.
• Conditions to the consummation of the Merger may not be satisfied or waived.
• Occurrence of any event that could lead to the termination of the Merger, potentially requiring LENSAR to pay a termination fee.
• Effect of the announcement or pendency of the Merger on LENSAR's ability to retain and hire key personnel, or its operating results and business generally.
• Potential for unknown, probable, or estimable liabilities related to the Merger or unexpected costs, charges, or expenses.
• Diversion of management's time and attention to issues relating to the Merger.
• Significant transaction costs in connection with the Merger.
• Legal proceedings may be instituted against LENSAR following the announcement of the Merger, which may have an unfavorable outcome.
• LENSAR's stock price may decline significantly if the Merger is not consummated.

Future Outlook

The document primarily focuses on past events and current legal challenges related to the merger. Forward-looking statements are mostly disclaimers about risks associated with the merger's completion and its impact. The Discounted Cash Flow analysis did account for equity raises anticipated to be completed by LENSAR management and reflected in the March LENSAR Projections.

Management Comments

• "The Company believes that no further disclosure is required to supplement the Definitive Proxy Statement under applicable laws."
• "Solely to moot the claims in the Demand Letters and minimize the risk, costs, burden, nuisance and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, the Company hereby supplements the disclosures contained in the Definitive Proxy Statement."
• "Nothing in this Supplement will be deemed an admission of the legal necessity or materiality under any applicable laws for any of the supplemental disclosures set forth herein."
• "The Company vigorously denies all allegations in the Demand Letters, including that any additional disclosure was or is required, and believes that the supplemental disclosures contained herein are immaterial."
• "Except as required by law, LENSAR does not undertake any obligation to publicly update or review any forward-looking statement, whether because of new information, future developments or otherwise."

Industry Context

The document is highly specific to a single merger transaction within the medical device and ophthalmology sector. While it lists comparable companies and precedent transactions, it does not provide a broad analysis of industry trends beyond the context of the specific merger valuation.

Comparison to Industry Standards

• Selected Public Companies for comparison included Alphatec Holdings, Inc., Establishment Labs Holdings, Inc., RxSight, Inc., STAAR Surgical Company, Butterfly Networks, Inc. [Class A], SI-BONE, Inc., OrthoPediatrics Corp., NeuroPace, Inc., and Pulmonx Corp.
• Selected Precedent Transactions for comparison included acquisitions such as Paragon 28, Inc. by Zimmer Biomet Holdings, Inc.; Silk Road Medical, Inc. by Boston Scientific Corp.; Lumenis Surgical Business by Boston Scientific Corp.; Byte by Dentsply Sirona Inc.; ACell, Inc. by Integra LifeSciences Holdings Corp.; Avedro, Inc. by Glaukos Corp.; Acelity Inc. by 3M; Osiris Therapeutics, Inc. by Smith & Nephew plc; Cianna Medical, Inc. by Merit Medical Systems, Inc.; Invuity, Inc. by Stryker Corp.; K2M Group Holdings, Inc. by Stryker Corp.; JOTEC AG by CryoLife, Inc.; Syneron Candela by Apax Partners; Cynosure, Inc. by Hologic, Inc.; and Zeltiq Aesthetics, Inc. by Allergan plc.
• LENSAR's trading multiples (5.2x 2025E Revenue, 4.0x 2026E Revenue as of March 21, 2025) were notably higher than the median for selected public companies (2.8x 2025E, 2.4x 2026E).
• WFS's implied per share value ranges for LENSAR Common Stock varied across the three valuation methodologies: the Discounted Cash Flow analysis yielded a range ($9.89 to $12.53) below the Cash Consideration ($14.00) and Discounted Consideration Amount ($16.03), while the Selected Public Companies analysis ($12.27 to $16.51) and Selected Precedent Transactions analysis ($10.53 to $18.30) both included ranges that encompassed or exceeded the merger consideration.

Legal Proceedings

• Receipt of several demand letters from purported LENSAR stockholders alleging that the Definitive Proxy Statement (and Preliminary Proxy Statement) omits material information regarding the Merger, rendering disclosures false and misleading in violation of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934.
• Stockholders are seeking Company books and records pursuant to Section 220 of the Delaware General Corporation Law.
• The Company is providing supplemental disclosures solely to moot the claims and minimize litigation risks, without admitting liability or wrongdoing.
• The Company vigorously denies all allegations.

Stakeholder Impact

• Shareholders: Directly impacted by the merger terms, the supplemental disclosures, and the ongoing legal challenges. Their approval is required for the merger.
• Management: Time and attention may be diverted to issues relating to the merger and legal proceedings.
• Employees: Potential impact on retention and hiring due to the merger's announcement or pendency.

Next Steps

• A special meeting of LENSAR's stockholders is scheduled for July 2, 2025, to obtain stockholder approval for the proposed Merger.

Key Dates

Keywords

LENSAR, Alcon, Merger, Proxy Statement, SEC Filing, Shareholder Litigation, Financial Analysis, Valuation, M&A, Corporate Governance, Risk Factors, DEFA14A, Schedule 14A, Alcon Research LLC, VMI Option Merger Sub Inc.