Steel Partners Holdings sent InMode’s board a letter Thursday offering to buy the whole company for $16.75 a share in cash. The number matters less than who it’s aimed at: it tops the $16.20-a-share bid made on June 17 by M.N. Business Strategy, a group that includes InMode co-founder and chief executive Moshe Mizrahy. In other words, one of InMode’s own shareholders just outbid the founder-CEO who is trying to take the company private. The stock rose about 4% before the open.
InMode is a medical-aesthetics maker based in Yokneam, Israel, founded in 2008. It sells minimally- and non-invasive radiofrequency devices that clinics use for skin tightening, wrinkle reduction, hair removal and body treatments. Once a market darling, the stock has been hammered — the “unaffected” price Steel cites is just $13.95, and even the higher $16.75 offer is only a 20% premium to that. That is the whole tension in one line: this is a take-private of a company whose shares have fallen far enough that both insiders and activists smell a bargain.
When Mizrahy’s group floated its unsolicited $16.20 offer, InMode did the textbook thing and formed a special committee to review it — the standard move when a CEO tries to buy the company he runs, because his incentives and his shareholders’ point in opposite directions. Investors pushed back that $16.20 shortchanged them. Steel’s counter is 55 cents higher, all cash, and lets existing holders roll up to 40% of their equity into the Steel-owned business. It also comes with a stopwatch: Steel demanded a substantive written response from “genuinely independent” directors by 5 p.m. Eastern on July 13.
Our take: The 55-cent gap is almost beside the point. The value Steel Partners just created is competition. A management-led buyout is the most conflicted deal in corporate finance: the people with the best read on what a company is worth are the ones trying to buy it, and every dollar they save comes out of the sellers’ pockets. Left unchallenged, a founder-CEO’s “take it or leave it” tends to become the price. A credible rival bid forces the special committee to actually shop the company and drag the number toward fair value. Whether InMode ends up selling for $16.75, for more, or staying public, its minority holders are better off Thursday than they were Wednesday — because someone finally made the insiders compete.
It’s the aggressive edge of a deal wave that keeps widening. It rhymes with Vertex paying roughly double to land Crinetics and with strategic buyers writing giant checks, from MasTec’s $1.65 billion grab of an electrical contractor to Apple’s $30 billion U.S. chip commitment. The difference here: the buyer isn’t a strategic chasing growth. It’s a shareholder forcing an auction on the people who run the business.
What to watch
- The July 13 deadline. Steel wants an answer from independent directors by 5 p.m. ET Monday. A slow-walk or a quick rejection would tell you how independent that “special committee” really is.
- A counter from the CEO. Mizrahy’s group can raise. If $16.20 climbs to $17-plus, that’s proof the process is working exactly as intended.
- The 40% rollover. Steel is letting holders keep skin in the game. Heavy interest would signal shareholders think the company is worth more than any bid on the table today.
- Aesthetics demand. InMode’s slide is the reason it’s cheap. A soft market for elective cosmetic devices caps how high any bidder will go.