Steel Partners offers $16.75 per share to acquire InMode

Steel Partners Holdings L.P. offered $16.75 per share in cash to acquire InMode Ltd., topping a competing bid from the chief executive officer and sending the medical-device maker's stock up 4% in premarket trading Thursday.

"Our offer provides InMode shareholders with a substantial premium and an opportunity to participate in the company's future through a rollover," Steel Partners said in a letter to InMode's board dated Wednesday.

The $16.75 offer represents a 20% premium to InMode's unaffected closing price of $13.95 and exceeds the $16.20 per share proposal from CEO Moshe Mizrahy. Steel Partners, a significant long-standing shareholder, said existing holders can roll over up to 40% of their equity into the Steel-owned entity. InMode shares closed Wednesday at $14.46 and rose to $15.40 in premarket trading, still below the offer price — suggesting some investors doubt the deal will close at that level.

The bid sets up a potential boardroom battle over InMode's future, with Steel Partners calling for Mizrahy's removal and questioning his conduct during the strategic review process. The firm set a 5:00 p.m. Eastern deadline on July 13 for independent directors to provide a substantive written response.

Steel Partners alleged that Mizrahy acquired approximately 800,000 shares between Feb. 24 and March 10, shortly before a March 13 buyback announcement that lifted the stock nearly 6%. The firm questioned whether those purchases raised issues regarding trading on material non-public information. Mizrahy's buyer group includes Jeffrey Royer, principal owner of Medimor — InMode's main manufacturing facility — and owners of Wigmore Medical, the company's U.K. distributor, which Steel Partners described as a conflict of interest.

The letter also noted that Mizrahy's offer values InMode based on estimated 2026 adjusted EBITDA of $65 million, which sits below the company's May 6 guidance range of $73 million to $78 million for the year. That gap suggests Mizrahy's bid may undervalue the company relative to its own projections, Steel Partners argued.

Steel Partners called on the board to form an independent special committee and retain an independent investment bank to engage with Steel around its offer. The company's strategic review, which began earlier this year, has now drawn two competing proposals, with the higher bid coming from an activist shareholder rather than management.

InMode, which develops minimally invasive aesthetic medical devices, has seen its stock decline significantly from its 2021 peak above $100 as growth slowed and competition intensified. The company's market capitalization stood at roughly $1.2 billion based on Wednesday's close, a fraction of its valuation during the pandemic-era boom in cosmetic procedures. The competing bids come as InMode faces headwinds from softer demand in its core U.S. market and increasing competition from rivals offering similar radiofrequency and laser-based technologies.

This article is for informational purposes only and does not constitute investment advice.