Allergan builds out aesthetics business with $2.5B deal
- In yet another deal, Allergan announed Monday it is acquiring medical technology company Zeltiq, which should help boost the Irish pharma's aesthetics business.
- Allergan will pay $56.50 per Zeltiq share, or about $2.5 billion in total. The acquirer expects the deal to be immediately accretive, and close sometime in the second half of this year provided Zeltiq shareholders approve it.
- The transaction gives Allergan control of the target's CoolSculpting technology platform, which uses non-surgical techniques to freeze and kill fat cells without hurting the skin. Zeltiq saw its highest quarterly revenues ever during the fourth quarter, with sales soaring more than 34% year-over-year to $104.5 million.
"With CoolSculpting, our offerings to plastic surgeons, dermatologists and aesthetic practitioners will now extend to three of the largest and fastest-growing segments of their practices, putting Allergan in a unique position to provide expanded customer service, and help meet the needs of patients," Allergan CEO Brent Saunders said in a Feb. 13 statement.
The acquisition gives Allergan a place in the body-contouring field, which focuses on reshaping and removing of excess skin or fat. The field is primed for "lucrative growth owing to factors such as rising number of obese patients, growing need for technologically advanced products to meet the increasing demand of aesthetical improvement procedures such as excess skin removal, skin tightening & liposuction," according to a report from Grandview Research.
Meanwhile, Markets and Markets projects the global medical aesthetics market to increase by a compounded annual growth rate of 10.8% from 2016 to 2021, and reach $13.3 billion by the out year.
Zeltiq had about $354 million in sales during the 2016 fiscal year, and Allergan expects those revenues to have a growth potential of 17% to 20% in 2017.
While the technology picked up through the transaction is new for Allergan, dealmaking is not. The company has been active in recent months, sticking with its plans to build through stepping-stone acquisitions. Recent acquisitions include LifeCell, Tobira Therapeutics, as well as a handful of smaller targets.
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