Open Letter: Lensar (LNSR) Shareholders Should Reject Alcon's (ALC) Takeover Offer

ALC is getting a sweetheart deal and grossly undervalues LNSR

Disclaimer: All information provided herein by Cedar Grove Capital Management, LLC (“Cedar Grove Capital”) is for informational purposes only and does not constitute investment advice or an offer or solicitation to buy or sell an interest in a private fund or any other security. An offer or solicitation of an investment in a private fund will only be made to accredited investors pursuant to a private placement memorandum and associated documents.

Cedar Grove Capital may change its views about or its investment positions in any of the securities mentioned in this document at any time, for any reason or no reason.

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To all investors of LENSAR (LNSR),

This morning, the company announced a buyout offer from Alcon (ALC) for $14/share in cash + a $2.75/share cash milestone consideration based on the company’s ability to achieve 614,000 cumulative procedures with LENSAR’s products between January 1, 2026, and December 31, 2027.

Under the terms of the agreement, Alcon will purchase all outstanding shares of LENSAR for $14.00 per share in cash (an aggregate implied value of approximately $356 million), with an additional non-tradeable contingent value right offering up to $2.75 per share in cash, conditioned on achievement of 614,000 cumulative procedures with LENSAR’s products between January 1, 2026, and December 31, 2027.

The total potential consideration of $16.75 per share represents a premium of 24% to LENSAR’s 30-day VWAP and a premium of 47% to LENSAR’s 90-day VWAP, assuming the milestone is met. The transaction represents a total consideration of up to approximately $430 million.

We think that while this buyout offer has been in the works for months now while the company was trading in the high single digits, the most recent announcement from Alcon (ALC) grossly undervalues the company and is walking away with a sweetheart deal.

LENSAR’s most recent earnings report demonstrates how well its technology is being received and implemented in practices worldwide. As of midday, March 24th, 2025, the company is being valued at ~2.4x NTM Sales of ~$68 million.

With no debt on the balance sheet, strong topline growth, inflecting FCF and adj. EBITDA profitability, and assuming no further multiple expansion, we believe that the company is worth north of $20 a share based on the current trajectory.

We do not believe that management recognizes the fair value of the company at today’s levels and that the agreed-upon buyout price benefits Alcon shareholders more than it does LENSAR’s.

We strongly urge LENSAR (LNSR) shareholders to categorically reject this low-ball offer from Alcon (ALC) and either a) make management come back with a superior buyout price or, b) allow LENSAR (LNSR) to remain a public company so shareholders can recognize the full value.

Best,

Paul Cerro

CIO | Cedar Grove Capital Management

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Disclaimer: All information provided herein by Cedar Grove Capital Management, LLC (“Cedar Grove Capital”) is for informational purposes only and does not constitute investment advice or an offer or solicitation to buy or sell an interest in a private fund or any other security. An offer or solicitation of an investment in a private fund will only be made to accredited investors pursuant to a private placement memorandum and associated documents.

Cedar Grove Capital may change its views about or its investment positions in any of the securities mentioned in this document at any time, for any reason or no reason. Cedar Grove Capital may buy, sell, or otherwise change the form or substance of any of its investments. Cedar Grove Capital disclaims any obligation to notify the market of any such changes.

The enclosed material is confidential and not to be reproduced or redistributed in whole or in part without the prior written consent of Cedar Grove Capital. The information in this material is only current as of the date indicated and may be superseded by subsequent market events or for other reasons. Statements concerning financial market trends are based on current market conditions, which will fluctuate. Any statements of opinion constitute only current opinions of Cedar Grove Capital which are subject to change and which Cedar Grove Capital does not undertake to update. Due to, among other things, the volatile nature of the markets, and an investment in the fund/partnership may only be suitable for certain investors. Parties should independently investigate any investment strategy or manager, and should consult with qualified investment, legal and tax professionals before making any investment.