"They don't have a lot of money in the bank right now and we are exercising a lot more caution."

Mergers galore


Some of the biggest names in aesthetic lasers include Palomar, Syneron, Cutera, Lutronic, Sciton and Cynosure. Israeli-based manufacturer Syneron completed a merger with Maryland-based laser company Candela in early January.

"The idea is really to put together the leading companies," says Tenenbaum. "We are going to be far and away the leader in this space. Syneron, founded in 2001, is a young company. We've grown rapidly. Candela is a very established company with almost 40 years in the business and considered best of breed."




A lot of the consolidation taking place is being done not only to form stronger companies, but also to take advantage of some of the research and development out there as the technology continues to evolve.

For example, Syneron recently announced that it has signed an agreement to acquire Primaeva Medical, Inc., a Calif.-based aesthetic technology company and maker of an RF device for the minimally invasive treatment of skin laxity and wrinkles. Syneron is expected to release the technology in 2010.

"It's been shown that it's not that people are losing interest," says Tenenbaum. "What bothers them will continue to bother them. The overall macromarket environment should quickly swing back to normal."

Manufacturers like Syneron are also taking every opportunity to expand their international investments.

"We do continue to see healthy growth in many international markets - especially in the Asian markets - China, for example, is a very healthy growth opportunity for us," says Tenenbaum.

Fierce financing

One of the major challenges on the end user side of the industry is getting financing for cosmetic lasers. New lasers can run about $80,000 and some even more than $100,000. In this economy, prices are dropping and there appears to be greater creativity in the way manufacturers are securing revenue.

"I've recently seen some of the best pricing I've ever encountered," says Russell. "All the laser companies are extremely competitive right now."

With equipment financing so hard to come by, medi-spas and practicing physicians are being required to have stellar credit ratings before even being considered for financing. For those looking to invest but having a hard time coming up with the dough, profit-sharing and pay-as-you-go programs are being offered. With this kind of deal, a practitioner can pay $25,000 down and $5,000 for a certain number of procedures.

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