Private equity firm Accelmed Partners II (AP-II) has agreed to acquire TearLab for $25 million. The payment, which will be made over two tranches, will result in TearLab delisting from the “over the counter” OTCQB market.
TearLab, the maker of the TearLab Osmolarity System to detect dry eye disease, will be a private company and AP-II will be the controlling shareholder. Proceeds from the AP-II investment will be used to pay down a portion of TearLab’s existing debt, and fund both organic and inorganic growth opportunities.
“We are very excited to begin a new era for the company with the support from Accelmed Partners and our lender CRG,” Seph Jensen, TearLab’s Chief Executive Officer, said in a company news release. “With the capital provided through this transaction, we are now able to both pursue continued development of our next generation Discovery platform as well as seek out targeted acquisition opportunities. The dry eye market has tremendous innovations at varying stages of development and commercialization for both treatments and diagnostics that aim to deliver meaningful benefits to physicians and patients. We look forward to creating a stronger company that is better positioned to help shape the landscape of dry eye care for the ophthalmic and optometric communities.”
“Our team has been keenly following TearLab as the company has become part of the clinical guidelines associated with evaluating ocular surface disease,” said Dr. Uri Geiger, Founder and Managing Partner of Accelmed Partners. “We are excited to be working with Seph and the executive team to accelerate the growth of TearLab’s sizable base of systems. The investment is highly representative of the transactions we seek to undertake and is our first deal in our new fund, AP-II.”
As part of the transaction, Dr. Geiger will become Chairman of the Board. Accelmed Partners’ General Partner, Lior Shav, who led the transaction, will join the company’s board of directors. Seph Jensen, TearLab’s CEO, will remain a board member.
TearLab’s Board of Directors have unanimously approved the transactions and recommended its shareholders approve the acquisition. The transaction is expected to close in the second quarter of 2020 and is not subject to any financing condition.