Valeant Pharmaceuticals International, Inc. (VRX - Analyst Report) has entered into a definitive agreement to acquire all of the outstanding common stock of Solta Medical, Inc. for $2.92 per share in cash or $250 million.
The offer price of $2.92 per share represents a 39.7% premium to Solta's closing share price of $2.09 per share on Dec 13, 2013.
The transaction is expected to close in the first quarter of 2014. Valeant expects the acquisition, once it goes through, to be immediately accretive to its bottom line.
We note that Solta designs, develops, manufactures, and markets energy-based medical device systems for aesthetic applications. The products designed by Solta includes the Thermage CPT system that provides non-invasive treatment options using radiofrequency energy for skin tightening, the Fraxel repair system for use in dermatological procedures, the Clear + Brilliant system to improve skin texture and prevent the signs of aging, and the Liposonix system that destroys unwanted fat cells resulting in waist circumference reduction.
Solta generated revenues of approximately $145 million in 2012.
Dermatology is the key focus area for Valeant and it continues to develop its dermatology portfolio. Hence, the impending acquisition of Solta Medical is a strategic fit for Valeant which will further augment and diversify its product portfolio.
Valeant has been quite aggressive on the acquisition front in the last two years contributing to its solid growth. In Aug 2013, Valeant acquired Bausch + Lomb Holdings Inc. for $8.7 billion in cash.
Earlier, in Apr 2013, Valeant acquired Obagi Medical Products for $440 million following a bidding war with Merz Pharma Group. In Feb 2013, Valeant acquired Natur Produkt International for $137 million.
In Dec 2012, Valeant acquired the entire outstanding common stock of Medicis Pharmaceutical Corporation for approximately $2.6 billion.
We are impressed by the company’s broad product portfolio, strategic acquisitions and synergies obtained from the same.
Shares of Valeant Pharma gained 3.83% while share price of Solta jumped 39.7% on the acquisition news.
Valeant currently carries a Zacks Rank #3 (Hold). Right now, Shire (SHPG - Analyst Report) and Forest Laboratories look attractive. Both are Zacks Rank #1 (Strong Buy) stocks.