Steel Partners Holdings on Wednesday publicly disclosed an unsolicited proposal to acquire a controlling stake in InMode Ltd. (NASDAQ:INMD), offering shareholders a cash premium while criticizing the company's stock performance, capital allocation, and repeated guidance cuts.
The stock is trading near the upper end of its 52-week range of $13.14-19.78, according to Benzinga Pro data.
Steel Partners approached InMode about acquiring 51% of the company's outstanding shares at $18 per share. The offer represents a 29% premium to InMode's January 23 closing price, before media speculation surrounding a possible transaction emerged.
Steel Partners is already a shareholder, with roughly 800,000 InMode shares. That’s about 1.3% of the company.
According to the letter, Steel Partners has made numerous efforts to engage privately regarding the proposal but was rebuffed.
Steel Partners stated that its valuation reflects its assessment of InMode's business and growth outlook. The proposal would be funded entirely through existing cash and available borrowing capacity, with no financing contingencies, the firm said.
The letter highlighted what Steel Partners described as InMode's prolonged underperformance.
Total shareholder return stood at negative 19.18% over the past year, negative 59.35% over three years, and negative 53.24% over five years, according to figures cited in the letter.
Steel Partners also criticized InMode's balance sheet strategy, noting the company held $532.3 million in cash and cash equivalents as of its third-quarter 2025 earnings report, nearly half of its market capitalization, while carrying no debt.
The firm argued that InMode has failed to return excess cash to shareholders in a consistent and value-enhancing manner.
In addition, Steel Partners pointed to InMode's history of lowering guidance, citing seven reductions over the past nine quarters and additional downward revisions to the top end of 2025 revenue and non-GAAP gross margin guidance earlier this month.
InMode Sees preliminary fourth quarter sales of $103.60 million-$103.80 million compared to the consensus of $104.44 million.
The medical technology company narrowed fiscal 2025 sales from $365-$375 million to $370.2-$370.4 million versus the consensus of $370.55 million.
InMode forecasts fiscal 2026 sales of $365-$375 million compared to the Wall Street estimate of $384.47 million.
Steel Partners said it remains willing to engage with InMode's leadership and may pursue a binding offer directly with shareholders if discussions do not move forward.
Price Action: INMD stock is up 5.82% at $16 at the last check on Thursday, according to Benzinga Pro data.
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